Suppose your friend's employer will contribute to the account each year as part of the company's profit sharing plan. In addition, your friend expects a distribution from a family trust several years from now. What amount must she deposit annually now to be able to make the desired withdrawals at retirement?

Employer's annual contribution:			$ 1,500
Years until trust fund distribution:			20
Amount of trust fund distribution:			$ 25,000

To find the amount of the annual deposit now, it is easier to break down the components of the problem. Doing so for each of the following to find your friend's annual deposit, we get:
Value of employer's contribution at retirement:
Value of trust fund at retirement:
Amount to save each year now:

Answer rating: 100% (QA)

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