A 40-year-old woman decides to put funds into a retirement plan. She can save $1,000 a year and earn 7 percent on this savings. How much will she have accumulated if she retires at age 65? Use Appendix C to answer the question. Round your answer to the nearest dollar. $ At retirement how much can she withdraw each year for 20 years from the accumulated savings if the savings continue to earn 7 percent? Use Appendix D to answer the question. Round your answer to the nearest dollar.
A 40-year-old woman decides to put funds into a retirement plan. She can save $1,000 a year and earn 7 percent on this savings. How much will she have accumulated if she retires at age 65? Use Appendix C to answer the question. Round your answer to the nearest dollar.
$
At retirement how much can she withdraw each year for 20 years from the accumulated savings if the savings continue to earn 7 percent? Use Appendix D to answer the question. Round your answer to the nearest dollar.
$
We need to calculate the persent value of annuity by using this formula.
PV of annuity =CF* [1-1/(1+i)n]/i
Where CF =cash flow for each period
n =number of periods
i = rate of interest
For calculation of accumulated savings at retairnment, we need to calculate future value of persent value of annuity.
Future value =PV(1+i)n
Where PV =persent value
i=rate of interest
n= number of periods
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