You wish to retire after 30 years, at which time you want to have accumulated enough money
Question:
You wish to retire after 30 years, at which time you want to have accumulated enough money to receive an annuity of $55,000 a year for 18 years of retirement.
During the period before retirement, you can earn 9 percent annually, while after retirement you can earn 7 percent on your money.
a. What annual contributions to the retirement fund will allow you to receive the $55,000 annually?
b. What annual contributions are required if the contributions are made at the beginning of each year?
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...
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a PV A A PV IFA Appendix D Calculator 55000 10059 553245 n 18 i 7 553250 A F...View the full answer
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Related Book For 
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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