omework: Homework for section 4C ore: 0 of 1 pt 5 of 12 (12 complete) HW Score:

Question

omework: Homework for section 4C ore: 0 of 1 pt 5 of 12 (12 complete) HW Score: 70 83%, 8 5 of 12 4.C.27 Question Help uppose you are 35 years old and would lke to retire at age 65 Furthermore, you would like to have a retirement fund rom which you can draw an income of 125 0 0 per year forever! How much would you need to deposit each month to do this? Assume a constant APR of 7% and that the compounding and pay eriods are the same t To draw $125,000 per year, there must be sin your savings account when you retire Do not round until the final answer. Then round to the nearest integer as needed) Enter your answer in the answer box and then click Check Answer Clear All part to search

Explanation / Answer

He wants to have $125000 each year for ever.

7% of X = 125000

Therefore X = 1785714.28

This is the fund required to have 125000 as interest each year. This amount needs to be saved in 30 years.

Let annual amount saved = Y

Y(1.07^30-1)/.07 = 1785714.28

Y = 18904.292 to be deposited each year for 30 years.

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