Andy is 45 years old and is considering retiring at the age of 65. She has $35,000 in an interestbearing account that pays 4% compounded quarterly. Andy intents to go for a tour of the Balkan countries on the same year of the retirement (65 years of age) and has figured out that it would cost around $45,000. Andy also believes that he will survive until his age of 80. His HR department tells him that his total pension payments will be around $55,000 per year, however , in order to keep up his lifestyle, he needs to have at least $75,000/year after retirement . Thus , he will need to start saving some money to make up the shortfall .

At an interest rate of 6% , what amount of annuity does he need to set aside every year from now until his retirement in order to make up his shortfall ? This same interest rate is applicable for the time after his retirement