when you retire 40 years from now you plan to make 10 annual withdrawals from your savings accounts at the end of each year, until the 50th year. You will need 131,480 each year for 2 years, then 143,827 each year for 3 years and 166,728 each year for 5 years. You want to start saving for retirement now and plan to make annual payments for 20 years into an account that yields 8 percent compounded annually. After these deposits you plan to leave the money in the savings account until retirement earning the same interest. What should these annual payments be in order to satisfy your retirement needs? Assume end of year payments.
when you retire 40 years from now you plan to make 10 annual withdrawals from your savings accounts at the end of each year, until the 50th year. You will need 131,480 each year for 2 years, then 143,827 each year for 3 years and 166,728 each year for 5 years. You want to start saving for retirement now and plan to make annual payments for 20 years into an account that yields 8 percent compounded annually. After these deposits you plan to leave the money in the savings account until retirement earning the same interest. What should these annual payments be in order to satisfy your retirement needs? Assume end of year payments.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 16P
Related questions
Question
when you retire 40 years from now you plan to make 10 annual withdrawals from your savings accounts at the end of each year, until the 50th year. You will need 131,480 each year for 2 years, then 143,827 each year for 3 years and 166,728 each year for 5 years. You want to start saving for retirement now and plan to make annual payments for 20 years into an account that yields 8 percent compounded annually. After these deposits you plan to leave the money in the savings account until retirement earning the same interest. What should these annual payments be in order to satisfy your retirement needs? Assume end of year payments.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
