Question: You have just enrolled in a retirement program. The first of the equal annual payments into the retirement plan will be made in one year's

You have just enrolled in a retirement program. The first of the equal annual payments into the retirement plan will be made in one year's time, on your 31st birthday. The last of the payments will occur on your 60th birthday. You anticipate that the return earned on investments in the plan will be 6 percent per year.

Your goal for the plan is, beginning on your 65th birthday, you will make even annual withdrawals of $40,000 per year for 10 years.

What is the required payment into the account to hit your goal?

Step by Step Solution

★★★★★

3.45 Rating (158 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

To calculate the annual payments that you need to make into the retirement plan we can use the prese... View full answer

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!

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...

Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...

Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...

6-54. (Complex annuity payments) Milhouse, 22, is about to begin his career as st for a NASA contractor. Being a rocket scientist, Milhouse knows begin saving for retirement immediately. Part of his...

Dr.Ramsey Please assist me with my discussion post. Subject: Annuities Systematic risk evaluates the probability and extent of negative consequences to the larger body. For example, the government...

FINANCE HOMEWORK What is the present value of $3,000 per year for 8 years discounted back to the present at 9 percent is $_____(Round to the nearest cent) You are graduating from college at the end...

Hi. I need Chapter 11 part 1-4 Let me know. Thanks! (it wont letme add more than $8, but I will give $12+ tip) Personal Finance, Fifth Edition by Jeff Madura BUILDING YOUR OWN FINANCIAL PLAN WORKBOOK...

1 What are the main components of personal financial planning? Solve What is the purpose of a financial plan? Solve Identify some common actions taken to achieve financial goals. How does a job...

Q1. review case study #1 Understanding Your Employee Benefits: Investing in your Retirement found on page 123 of your textbook. Please post your answers to the two questions found at the end of the...

I am wondering if anyone has corrected solutions to fnce 300 assignments 1 2 and 3. I am concered about my answers and would love to compare. Pretty sure on my answers for 1 and 2 mainly interested...

Suppose the cell phone manufacturer Nokia provides the following information for its costs last month (in millions): Delivery expense to customers via...

The accounts of Aker Moving Company follow with their normal balances as of August 31, 2016. The accounts are listed in no particular order. Common Stock....... $ 53,300 Insurance Expense....... 600...

Find the cost function if the marginal cost function is given by C ' ( x ) = x 2 3 + 2 and 8 units cost $ 5 2 .

Sarjit Systems sold software to a customer for $80,000. As part of the contract, Sarjit promises to provide "free" technical support over the next six months. Sarjit sells the same software without...

From the following list, identify the accounts that will appear on the postclosing trial balance. ACCOUNTS 1. Cash 2. Accounts Receivable 3. Supplies 4. Equipment 5. Accumulated Depreciation 6....

On May 1, 2018, Varga Tech Services signed a $6,000 consulting contract with Shaffer Holdings. The contract requires Varga to provide computer technology support services whenever requested over the...

Following are the steps in the accounting cycle. Arrange the steps in the proper sequence. 1. Record closing entries. 2. Interpret the financial information. 3. Prepare a postclosing trial balance....

Assume Estate Construction is constructing a building for CyberB, an online retailing company. Under the construction agreement, if for some reason Estate could not complete construction, CyberB...

What has increased the pressure on companies to link executives' pay to their performance?Mulliple Cholicethe Securities and txchange Commission's strict limits on insider tradingthe Securities and...

The Town of McHenry has $6,000,000 in general obligation bonds outstanding and maintains a single debt service fund for all debt service transactions. On July 1, 2012, a current refunding took place...

The City of South Dundee budget for the fiscal year ended June 30, 2012, included an appropriation for the police department in the amount of $16,000,000. During the month of July 2011, the following...

Chapters 2 through 9 deal with specific knowledge needed to understand accounting and financial reporting by state and local governments. A continuous problem is available on the texts Web site...

Mayr et al. (1994) took an SRS of 240 children who visited their pediatric outpatient clinic. They found the following frequency distribution for the age (in months) of free (unassisted) walking...

For the population in Example 2.2, consider the following sampling scheme: a. Find the probability of selection i for each unit i. b. What is the sampling distribution of =8?

Potential jurors in some jurisdictions are chosen from a list of county residents who are registered voters or licensed drivers over age 18. In the fourth quarter of 1994, 100,300 jury summons were...