Question
Today is your 25th birthday and you have a dream of retiring on your 65th birthday. You want to put aside however much is necessary
Today is your 25th birthday and you have a dream of retiring on your 65th birthday. You want to put aside however much is necessary on your 31st through 65th birthdays (35 annual payments) to have enough to retire. You've estimated that you will live until you are 90 and you want the first withdrawal to occur on your 66th birthday, with the last payment occurring on your 90 th birthday. You think that you will need $175,000 per year to spend during retirement. You estimate constant interest rates of 10.25%. Assuming that you currently have $10,000 deposited in your retirement account, how much must you put aside each year in order to have sufficient money to retire at age 65?
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