Answered: udy will retire in 20 years. This year…

udy will retire in 20 years. This year he wants to fund an amount of €1,500,000 to become available in 20 years. How much does he have to deposit into a pension plan earning 7% annually? Use excel.

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 8E

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Concept explainers

Retirement Income

Retirement income is the income received by the retiring person after retirement. Income can either be paid every month or paid annually. The retiree would get a guaranteed income until their death. Retirement income payment differs from person to person based on their investment type and payment method. Some are paid on a lump-sum basis and some are paid in a regular series with fixed payment or variable cash flow. Retirement income can be created from retirement savings, investment, salary, bonus, and wages from employment. Every working individual should plan their retirement income according to their income goals for the future. The plan should be made by identifying suitable income sources, estimating future expenses, applying a savings plan, and managing risk and assets. The most common age for retirement is between 60-65 years.

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Rudy will retire in 20 years. This year he wants to fund an amount of €1,500,000 to become available in 20 years. How much does he have to deposit into a pension plan earning 7% annually?

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