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you are 25 years old today and plan to retire 40 years from today (at age 65) you expect to live independently for 25 years
you are 25 years old today and plan to retire 40 years from today (at age 65) you expect to live independently for 25 years thereafter (until age 90) you want a retirement income which has in the first year the same purchasing power as $50,000 has today. however your retirement income will be of a fixed amount. so your real income will decline over time. your retirmenet income will start the day you retire, 40 years from today (age 65 ) and you expect to receive a total of 25 retirement payment (age 65 to age 89, age 65 included , n=25) inflation is expected to be constant at 5 percent. you have no savings now and plan to earn 10 percent on all your future savings.
how much must he save end of each year with the first saving starting end of this first year and your last saving end of year 65 to meet his retirement goals?
note:
1) your last year of savings and withdrawals ,will be same, age 65
2) your savings starts one year from now so end of the year savings for n=40
3) tour withdrawals starts at age 65, so BGN of the year withdrawals flr n=25
a. $325,000
b. $7,941
c.$297,028
d. $6,563
e. $7,219
d. $326,730
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