Nora is planning for retirement. She'd like to retire on her 65th birthday, and then be able to withdraw $45,000 on

Question

Nora is planning for retirement. She'd like to retire on her 65th birthday, and then be able to withdraw $45,000 on each following birthday for the next 25 years. She makes yearly deposits starting on her 42th birthday and continuing until her 65th birthday (right before she retires). Her investment accounts earn 5% annual effective interest. How much should her yearly deposits be? Show all work.

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Retirement Planning: Annual Withdrawl n i 1+i (1+i)^-n 1- [(1+i)^-n] PVAF=[1- [(1+r)^-n]] /r Amount Required on 65th Birthday $ 45,000 (A) 25 5% 1.05 0.2953 0.7047 14.0940(B) $ 634,230 (C= A*B) Amount required on 65th Birthday = $634,230 Amount required n r 1+r (1+r)^n [(1+r)^n] - 1 FVAF=[(1+r)^n] - 1/r Yearly Deposit $ 634,230(C) 24 5% 1.05 3.2251 2.2251 44.502(D) $ 14,252 (C/D) Yearly Deposit to achive required Goal = $ 14,252

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Nora is planning for retirement

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	Annual Withdrawl	n	i	1+i	(1+i)^-n	1- [(1+i)^-n]	PVAF=[1- [(1+r)^-n]] /r	Amount Required on 65th Birthday
	$ 45,000 (A)	25	5%	1.05	0.2953	0.7047	14.0940(B)	*$ 634,230 (C= AB)**

Amount required	n	r	1+r	(1+r)^n	[(1+r)^n] - 1	FVAF=[(1+r)^n] - 1/r	Yearly Deposit
$ 634,230(C)	24	5%	1.05	3.2251	2.2251	44.502(D)	$ 14,252 (C/D)