Question: Please show each method. Each method also needs to be the same answer Exercise #1: Retirement savings. You want to retire in 30 years. To

Please show each method. Each method also needs to be the samePlease show each method. Each method also needs to be the same answer

Exercise #1: Retirement savings. You want to retire in 30 years. To fund the retirement, you deposit $25,000 into an account now and plan to save an equal amount each year for the next 30 years. Once you retire, you want to withdraw $50,000 at the end of each year for 25 years. r=6%. How much do you need to save at the end of each year for the next 30 years? Method 1A: PV the 25 withdrawals to Y30; FV the initial deposit; solve for PMT whose FV equals the net amount: FV PMT= Press PV PV = PMT= Press FV Net, then FV = PV= n= Press PMT Calculator Method 1B: PV the 25 withdrawals to Y30; solve for PMT whose FV equals the net amount, but add the initial deposit as PV: FV = PMT= Press PV FV= PV= n= Press PMT Method 2B: PV the 25 withdrawals as a delayed annuity to YO; subtract your initial deposit; solve for PMT whose PV equals the computed amount: FV PMT= Press PV FV = PMT= Press PV Net, then PV = FV h= Press PMT

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!