A 30-year old man is planning for his retirement in 35 years

Finance Apr 19, 2021

A 30-year old man is planning for his retirement in 35 years. He wants to be able to withdraw $90,000 each year for 25 years after he retires. How much will he need to save each year for the next 35 years if he can earn 12 percent on his savings?

Expert Solution

Calcuating Present Value at retirement,

Usng TVM Calculation,

PV = [FV = 0, PMT = 90,000, N = 25, I = 0.12]

PV = $705,883

Calculating Annual Saving,

Using TVM Calculation,

PMT = [PV = 0, FV = 705,883, N = 35, I = 0.12]

PMT = $1,635.26

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote