Answer:
Correct answer is:
$9,488.18
Explanation:
Value on the day of retirement:
Stock investment = FV (rate, nper, pmt, pv, type) = FV (12%/12, 25*12, -500, 0, 0) =$939,423.31
Bond investment = FV (rate, nper, pmt, pv, type) = FV (7%/12, 25*12, -175, 0, 0) =$142,762.55
Total investment value as on date of retirement = $939,423.31 + $142,762.55 = $1,081,185.86
Withdrawal period (months) = 30 * 12 = 360 months
Monthly interest rate = 10%/12
Monthly withdrawal = PMT(rate, nper, pv, fv, type) = PMT(10%/12, 360, -1081185.86, 0, 0) = $9,488.18
Hence option C is correct and other options A, B and D are incorrect.
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