You plan on retiring in 45 years. You will open a retirement account today with an initial deposit of $2000. You will then begin saving in 45 equal annual payments starting at the end of the first year (starting at t = 1) with the last deposit being made at retirement, at t = 45. Additionally, your employer will pay you a bonus of $25,000 at year t = 25 rewarding your 25 years of service; you will put this bonus into your retirement account. Additionally, you want to take a vacation to Hawaii at year t = 10, which will cost you $8,000 and come from your retirement account as an early withdrawal. At retirement you would like to make 30 withdrawals of $125,000 per year for the next 30 years, starting at t=46. Finally, at the end of your 30 year retirement (t = 75), you would like to donate $10,000,000 to your alma mater so that they will name a door on a classroom for you. If your retirement account will pay you 5% interest per year, what do your annual deposits into the account need to be?

Answer rating: 100% (QA)

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