Question: If you could explain as well how to answer this on a BA2 calculator I would appreciate, thank you! You are 40 years old and

You are 40 years old and want to retire at age 65.

If you could explain as well how to answer this on a BA2 calculator I would appreciate, thank you!

Each year, starting one year from now, you will deposit an equal

You are 40 years old and want to retire at age 65. Each year, starting one year from now, you will deposit an equal amount into a savings account that pays 7.4% interest. The last deposit will be on your 65th birthday. On your 65th birthday you will switch the accumulated savings into a safer bank account that pays only 4.2% interest. You will withdraw your annual income of Sl 30,000 at the end of that year (on your 66th birthday) and each subsequent year until your 85th birthday. On that birthday you want to give $800,000 to your children. How much do you have to save each year to make this retirement plan happen? How much do you have to save per year during your working years in order to achieve your retirement goal? (Round to the nearest cent.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!