You plan to retire at age 40 after a highly successful but short career. You would like...
You plan to retire at age 40 after a highly successful but short career. You would like to accumulate enough money by age 40 to withdraw $200,000 per years for 40 years. Your account has an interest rate of 5%. How much do you need to accumulate in your account by the time you retire?
Homework Answers
| Amount that needs to be accumulated by the age 40 would be | ||
| the present value of an annuity for 40 years | ||
| Present Value Of Annuity | ||
| = C*[1-(1+i)^-n]/i] | ||
| Where, | ||
| C= Cash Flow per period | ||
| i = interest rate per period | ||
| n=number of period | ||
| = $200000[ 1-(1+0.05)^-40 /0.05] | ||
| = $200000[ 1-(1.05)^-40 /0.05] | ||
| = $200000[ (0.858) ] /0.05 | ||
| = $34,31,817.27 | ||
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You plan to retire at age 40 after a highly successful but short
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to accumulate enough money by age 40 to withdraw $227,000 per year
for 40 years. You plan to pay into your account 15 equal
installments beginning when you are 25 and ending when you are 39.
Your account bears interest of 10 percent per year.
Use Appendix A for your reference. (Use appropriate
factor(s) from the tables provided.)
Required:
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filled a few answers in not sure how to get the ones I didnt if
someone is able to show me steps for the ones not answered or wrong
please
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