At 20 years old, Josh is an avid saver. He wants to put an equal amount each year from age 21 to 50 (30 years) such that starting at age 65 he can make a guaranteed annual withdrawal of $50,000 forever without touching the corpus, which will be the inheritance money for his family. He will make no deposits during the years of age 51 through 65. At a conservative return of 6.5% per year for all the years, what amount must he invest each year from age 21 through 50? The amount that must be invested each year is $

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 42P
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At 20 years old, Josh is an avid saver. He wants to put an equal amount each year from age 21 to 50 (30 years) such that starting at
age 65 he can make a guaranteed annual withdrawal of $50,000 forever without touching the corpus, which will be the inheritance
money for his family. He will make no deposits during the years of age 51 through 65. At a conservative return of 6.5% per year for all
the years, what amount must he invest each year from age 21 through 50?
The amount that must be invested each year is $
Transcribed Image Text:At 20 years old, Josh is an avid saver. He wants to put an equal amount each year from age 21 to 50 (30 years) such that starting at age 65 he can make a guaranteed annual withdrawal of $50,000 forever without touching the corpus, which will be the inheritance money for his family. He will make no deposits during the years of age 51 through 65. At a conservative return of 6.5% per year for all the years, what amount must he invest each year from age 21 through 50? The amount that must be invested each year is $
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