You are planning for your retirement that you expect to occur exactly 30 years from today. In
Question:
You are planning for your retirement that you expect to occur exactly 30 years from today. In order to maintain your present lifestyle, you would like to receive $30,000 per year at the beginning of each year through your retirement, which you expect to last for 20 years. Prior to your retiring you expect to earn 12% interest, compounded quarterly. After retirement, you will be more conservative in your investments and only expect to earn 6% interest, compounded annually.
a) How much must you need at the start of your retirement in order to fulfill your lifestyle wishes?
b) How much must you deposit quarterly over the next 30 years in order to accumulate enough money for your retirement?
c) Suppose your financial situation has changed, and you can make annual contributions only for the next 10 years. Thus, you will deposit nothing for the last 20 years before your retirement.
How much must you deposit annually at the end of each of the next 10 years in order to accumulate enough money for your retirement?
Horngrens Accounting
ISBN: 978-0134674681
12th edition
Authors: Tracie L. Miller nobles, Brenda L. Mattison, Ella Mae Matsumura