Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Case Information: Years until retirement: 30 Amount to withdraw each year: $ 90,000 Years to withdraw in retirement: $ 20 Interest rate: 8% Inflation rate:

Case Information:
Years until retirement: 30
Amount to withdraw each year: $ 90,000
Years to withdraw in retirement: $ 20
Interest rate: 8%
Inflation rate: 2%
Employer's annual contribution: $ 1,500
Years until trust fund distribution: 20
Amount of trust fund distribution: $ 25,000
  1. How much does she need to have in retirement at the end of year 30 in order to receive her retirement payments assuming that these retirement payments continue to increase at 2% per year throughout her retirement?

  2. If she starts making deposit amounts in one year and makes equal deposit amounts each year and makes her last deposit on the day she retires, what amount must she deposit annually to be able to make the desired withdrawals at retirement?

  3. If she starts making deposit amounts in one year and her deposits increase at the inflation rate of 2% each year until she makes her last deposit on the day she retires, what amount must she initially deposit to be able to make the desired withdrawals at retirement?

Please show Excel formulas

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting And Finance For Non-Specialists

Authors: Eddie McLaney, Peter Atrill

3rd Edition

9780273646327

More Books

Students also viewed these Accounting questions

Question

Discuss global cultural differences in GLOBE dimensions.

Answered: 1 week ago

Question

LO1 Discuss the objectives of human resource management.

Answered: 1 week ago