in planning for your retirement you would like to withdraw 40,000 every year for 17 years. The first withdraw starts 20 years from today. What value must you invest today if your return is 10% per year
Added by Tamara M.
Step 1
To find out how much you need at the beginning of the withdrawal period (which starts in 20 years), we will calculate the present value of an annuity. The formula for the present value of an annuity is: \[ PV = P \times \left(1 - (1 + r)^{-n}\right) / r \] Show more…
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Madhur L.
Assume that you have 40 years until retirement and have just started your first job. Once you retire, you anticipate that you will live for 30 additional years. Assume that you will require $100,000 per year to support yourself in retirement. All investments that you make will go into and stay in an account that returns 5% per year (i.e. however much you have at retirement will sit in that account and continue to accrue interest on the remaining balance.) How much will you have to save each year over the next 40 years to meet your goal? Assume that your first investment occurs at the end of your first year of work (yr 1) and that the last of your 40 investments occurs on the last day that you are employed (yr 40). For simplicity, assume that your first withdrawal is at the end of your first retirement year (yr 41).
Kevra B.
You want to be able to withdraw $25,000 from your account each year for 15 years after you retire. You expect to retire in 20 years. If your account earns 10% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?
Sai S.
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