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 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
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