plan to retire in 30 years. You will receive an inheritance of $200,000 in 25 years. You think you will want $50,000 per year when you retire for 30 years (the first withdrawal will come one year after you retire). You will begin saving an amount to meet your retirement goals one year from today. Required: If you think you can make 9 percent on your investments, how much will you need to save each year for the next 30 years to meet your retirement goals?
plan to retire in 30 years. You will receive an inheritance of $200,000 in 25 years. You think you will want $50,000 per year when you retire for 30 years (the first withdrawal will come one year after you retire). You will begin saving an amount to meet your retirement goals one year from today. Required: If you think you can make 9 percent on your investments, how much will you need to save each year for the next 30 years to meet your retirement goals?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Retirement Problem
- You plan to retire in 30 years.
- You will receive an inheritance of $200,000 in 25 years.
- You think you will want $50,000 per year when you retire for 30 years (the first withdrawal will come one year after you retire).
- You will begin saving an amount to meet your retirement goals one year from today.
Required:
If you think you can make 9 percent on your investments, how much will you need to save each year for the next 30 years to meet your retirement goals?
PV of $500,000 gift (to be given in 50 years) in 30 years = $89,215.44
PV of
Expert Solution
Step 1
In this we need to calculate the retirement amount and than can find out the future value of annuity for that.
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