Question

You wish to retire after 25 years; at which time you want to have accumulated enough money to receive an annuity of $60,000 a year for 20 years of retirement. During the period before retirement you can earn 3 percent annually, while after retirement you can earn 4 percent on your money. Question: What annual contribution to the retirement fund will allow you to receive the 60,000 annually? A) $28,238.02 B) $29,238.02 C) $22,363.84 D) $35,085.63

Name: you wish to retire after 25 years at which time you want to have accumulated enough money to receive an annuity of 60000 a year for 20 years of retirement during the period before retirement 29223
Uploaded: 2023-08-14T00:37:21-08:00
Duration: 2 min 49 s
Channel: Akash M
Description: you wish to retire after 25 years at which time you want to have accumulated enough money to receive an annuity of 60000 a year for 20 years of retirement during the period before retirement 29223

          You wish to retire after 25 years; at which time you want to
have accumulated enough money to receive an annuity of $60,000 a
year for 20 years of retirement.
During the period before retirement you can earn 3 percent
annually, while after retirement you can earn 4 percent on your
money. 
Question: What annual contribution
to the retirement fund will allow you to receive the 60,000
annually?
A) 
$28,238.02
B) 
$29,238.02
C) 
$22,363.84
D) 
$35,085.63

Added by Steven H.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Akash M

08/14/2023

Step 1

This can be done using the present value of an annuity formula: PV = A * ((1 - (1 + r)^(-n)) / r) Where PV is the present value, A is the annuity payment, r is the interest rate, and n is the number of periods. In this case, A = $60,000, r = 4%, and n = 20. Show more…

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You wish to retire after 25 years; at which time you want to have accumulated enough money to receive an annuity of $60,000 a year for 20 years of retirement. During the period before retirement you can earn 3 percent annually, while after retirement you can earn 4 percent on your money. Question: What annual contribution to the retirement fund will allow you to receive the 60,000 annually? A) $28,238.02 B) $29,238.02 C) $22,363.84 D) $35,085.63