You plan to retire in exactly 30 years. Your goal is to create a fund that will
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You plan to retire in exactly 30 years. Your goal is to create a fund that will allow you to receive $30,000 per year for the 20 years you think you will live after retirement. You can earn 10% compounded annually for the 20-year period after retirement. a. How much must he have accumulated at retirement 30 years from now so that he can have an annuity of $30,000 per year for the 20 years he will live after retirement? Assume the annuity as an ordinary annuity. b. How much would you need to invest today as a single amount to get the amount in (a) if the money can grow at 8% over the 30 years before retirement? c. If instead of investing a single amount, you prefer to raise the amount in (a) by depositing annuities at the end of each of the 30 years before retirement, determine the amount of that annuity, assuming 8% growth.
Related Book For
Principles Of Managerial Finance
ISBN: 978-0136119463
13th Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
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