Your retirement planning suggests a goal of $57,000 a year in today's dollars for 30 years of

Question:

Your retirement planning suggests a goal of $57,000 a year in today's dollars for 30 years of retirement. Retirement will begin 35 years from today, at which time you will expect your first annuity payment. Inflation between now and retirement is expected to be 4 percent annually (do not consider inflation during retirement). The anticipated yield over the pre retirement period is 7 percent annually, and 8 percent per annum is anticipated during retirement. Calculate how much you should set aside each year between now and retirement to achieve your goal.

Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Foundations of Financial Management

ISBN: 978-1259024979

10th Canadian edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

Question Posted: