Question
James who has worked as a professional marketer for 5 years and just turned 30 years of age. Unfortunately, James has been sentenced by a
James who has worked as a professional marketer for 5 years and just turned 30 years of age. Unfortunately, James has been sentenced by a doctor that he can only live 47 years more as he got cancer. James has decided to gather money of a retirement fund which will be returned age of 65 when he will retire. He wishes to have luxury life before he dies. Therefore, James thinks he would need $50,000 every year, starting at the end of the first year of retirement, and ending 77 years old. He would contribute the same amount of money into the fund at the end of every year until he retires at 65 years old.
- How much his retirement fund should be when he retires, if he wants to receive $50,000 annually during his retirement years? Assume that the annual interest of this retirement fund is 10% p.a.
- How much he should contribute every year before he retires? Assume that the annual interest of this retirement fund is 10% p.a. (Ordinary Annuity)
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