A woman is planning for retirement in 25 years and decides she can deposit $7,000 each year on December 31 into a retirement savings plan that she expects will pay 4% interest. In 10 years she also expects to receive a small inheritance of $8,000 that she can also put into her retirement fund. The woman anticipates that her retirement fund will need to last 25 years; she estimates that she will need $45,000 at the end of each year in retirement to cover her living expenses. Her plan is flawed. How much extra does she need to save every year (rounded to dollars and cents) to achieve her goals? (Do not round interim calculations)

Answer rating: 100% (QA)

Solution Calculation At the end of 25 years the womans retirement fund should have an amount of 3850... View the full answer