15. Deryl wishes to save money to provide for his retirement. Beginning one year
ID: 2686414 • Letter: 1
Question
15. Deryl wishes to save money to provide for his retirement. Beginning one year from now, he will begin depositing the same fixed amount each year for the next 20 years into a retirement savings account. Starting one year after making his final deposit, he will withdraw $135,000 annually for each of the following 15 years (i.e. he will make 15 withdrawals in all). Assume that the retirement fund earns 9% annually over both the period that he is depositing money and the period he makes withdrawals. In order for Deryl to have sufficient funds in his account to fund his retirement, how much should he deposit annually (rounded to the nearest dollar)?Explanation / Answer
to fund his retirement he needs =PV(0.09,15,135000) = 1088192.94
annual deposits =PMT(0.09,20,0,1088192.94) = $21,270.34
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