Ella Funt would like to set up her retirement account that will begin in 30 year

ID: 2820220 • Letter: E

Question

Ella Funt would like to set up her retirement account that will begin in 30 years. To play it safe, she wants to assume that she will live for withdraw $160,000 annually. Assuming her account will earn 9% interest during the next 30 years and 4% interenfterwards fo 35 years after she retires and she will the next 30 years to fund her retirement account? forever, how much will Elila need to save annually over $45,203 O$39,852 O $39454 O $53,248 & Moving to another question will save this response Question 4 of 5 6:26 PM arch 4o 9 0

Explanation / Answer

present value of retirement benefits at the time of retirement

Using present value function in MS excel

pv(rate,nper,pmt,fv,type) rate = 4% nper = 35 pmt = 160000 fv = 0 type = 0

PV(4%,35,160000,0,0)

($2,986,338.12)

Monthly Payment

Using PMT function in MS excel

pmt(rate,nper,pv,fv,type) rate = 9% nper = 30 pv = 0 fv = =2986338.12

($21,908.83)

All options are incorrect - amount of yearly payment is 21908.83