Chapter 6 Master it Excel is a tool for solving problems, but with many time value of money problems, you may still need to draw a time line This is a classic retirement problem. A friend is celebrating her birthday and wants to start saving for her anticipated retirement. She has the following years to retirement and retirement spending goals: Years until retirement 30 Arnount to withdraw each year: 90,000 Years to withdraw in retirement 20 Interest rate: 8% Because your friend is planning ahead, the first withdrawal will no take place until one year after she retires. She wants to make equal annual deposits into her account for her retirement fund. If she starts making these deposits in one year and makes her last deposit on the day she retires, what amount must she deposit annually to be able to make the desired withdrawals at retirement? Suppose your friend has just inherited a large sum of money. Rather than making equal annual payments, he has decided to make one lump sum deposit today to cover her retirement needs. What amount does she have to deposit today? company sharing plan. In addition, your friend Suppose your friend employer will contribute to the account each year as part of the s profit 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: 500 Years until trust fund distribution 20 25,000 Amount of trust fund distribution