LO6Apply time value of money concepts to put a monetary value on financial goals.

Funding a retirement goal. Owen Freeman wishes to have $800,000 in a retirement fund 20 years from now. He can create the retirement fund by making a single lump-sum deposit today.

If upon retirement in 20 years, Owen plans to invest $800,000 in a fund that earns 4 percent, what is the maximum annual withdrawal he can make over the following 15 years?

How much would Owen need to have on deposit at retirement in order to withdraw $35,000 annually over the 15 years if the retirement fund earns 4 percent?

To achieve his annual withdrawal goal of $35,000 calculated in part b, how much more than the amount calculated in part a must Owen deposit today in an investment earning 4 percent annual interest?