You plan to retire (again) in exactly 20 years. Your goal

jagguarpaw January 18, 2017 0 Comments

Question: You plan to retire (again) in exactly 20 years. You’re…

You plan to retire (again) in exactly 20 years. Your goal is to create a fund that will allow you to receive $20,000 at the end of each year for the 30 years between retirement and death (a psychic told you would die exactly 30 years after you retire). You know that you will be able to earn 11% per year during the 30-year retirement period.

How large a fund will you need when you retire in 20 years to provide the 30-year, $20,000 retirement annuity?

How much will you need today as a single amount to provide the fund calculated in part a if you earn only 9% per year during the 20 years preceding retirement?