Anuradha Dixit just turned 55. Anuradha is planning to retire in 10 years, and she currently has $500,000 in her pension fund. Based on the longevity pattern of her family, she assumes that she will live 20 years past her retirement rate; during each of these years she desires to withdraw $100,000 from her pension fund.

If the interest rate is 5% annually, how much will Anuradha have to save annually for the next 10 years? Assume that the first deposit to her pension fund will be today, followed by 9 more annual deposits, and the annual withdrawals from age 65 will occur at the beginning of each year.

Use the following spreadsheet (the numbers are not correct) and Goal Seek to find an answer to the above question AND the following 3 questions (listed after the spreadsheet).

1. How much is the annual withdrawn (deposit) at age 57?

2. How much is the account balance at the beginning of age 84?

3. How much is the account balance at the end of age 84?

SAVING FOR THE FUTURE Annual desired pension pa Annual Interest rate 100,000 10,000 Account balance, Deposit or withdrawal Interest earned Total in account Your age beginning of beginning of during yearend of year ear 500,000 535,500 572,775 ear 10,000 535.500 |