At the age of 30, you begin saving $6000 each year (with the first deposit one year from now) in an account that pays an annual interest rate of 7%. Your plan is to continue these annual deposits until you reach the age of 60. After your last deposit, you will start withdrawing a constant amount at the end of each year, beginning at age 61 and continuing until you reach the age of 80.

a. How much money will you have at age 60 (after your last deposit, i.e., after your 30^th deposit)

b. If your goal is to ensure that the funds last until you are 80, what constant amount will you be able to withdraw each year during your retirement?

Answer rating: 100% (QA)

To solve this problem we can break it down into two parts calculating the total amount of money save... View the full answer