If you make annual payments into a retirement plan during your working life, how much will you need to save each year to reach your retirement goal? (You will make the first payment at the end of the year).

If you make annual payments into a retirement plan during your working life, how much will you need to save each year to reach your retirement goal? (You will make the first payment at the end of the year).

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 44P

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Question

After graduation from university, you start working and you want to plan for your retirement. You will be retiring in 25 years and during your retirement, you plan to spend USD 20,000 per year. You expect your retirement to last 30 years. You believe you can earn 8% on your retirement savings. If you make annual payments into a retirement plan during your working life, how much will you need to save each year to reach your retirement goal? (You will make the first payment at the end of the year).

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