part2

Intro You just turned 21 years old and want to retire when you tum 65. You expect to Iive for 25 years after retirement and want to withdraw $60,000 per year in retirement, starting on your 65th birthday. You expect to earn a return of 6% on your investments every year. Part 1 Attempt 2/10 for 10 pts. What is the total present value (as of your 65th birthday) of the withdrawals you expect to make in retirement? Correct We need to find the present value of an annuity due: PV=C[R11/(1+R)t](1+R)=60,000[0.0611/(1+0.06)25]1.06=813,021 If you're using a financial calculator, you need to switch it from End Mode to Begin Mode in order to let it know that all cash flows occur at the beginning of a period. Using Excel (do not enter the thousands separators): =PV(rate, nper, pmt, pv, type) =60,000[0.0611/(1+0.06)25]1.06=813,021 If you're using a financial calculator, you need to switch it from End Mode to Begin Mode in order to let it know that all cash flows occur at the beginning of a period. Using Excel (do not enter the thousands separators): =PV(rate,nper,pmt,pv,type)=PV(0.06,25,60,000,0,1)=813,021 Part 2 I Attempt 1/10 for 10 pts. You want to save a constant amount every year. How much money should you save each year if you make the first deposit now and the last one one year before you turn 65