Question
A couple will retire in 50 years; they plan to spend about $32,000 a year in retirement, which should last about 25 years. They believe
A couple will retire in 50 years; they plan to spend about $32,000 a year in retirement, which should last about 25 years. They believe that they can earn 9% interest on retirement savings. |
a. | If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
Annual payment | $ |
b. | How would the answer to part (a) change if the couple also realize that in 20 years they will need to spend $62,000 on their childs college education? (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
Annual payment | $ |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started