Retirement: Annual deposits beginning on 36th birthday. How much for each deposit?
Not what you're looking for?
A friend is celebrating his 35th birthday today and wants to start saving for his retirement at age 65. He wants to be able to withdraw $10,000 from his savings account on each birthday for 10 years following his retirement; the first withdrawal will be on his 66th birthday. He wants to invest his money in the local savings bank, which offers 8 percent interest per year. He wants to make equal, annual payments on each birthday in a new savings account he will establish for his retirement fund.
a) If he starts making these deposits on his 36th birthday and continues to make deposits until he is 65 (last deposit on his 65th birthday), what amount must he deposit annually to be able to make the desired withdrawals on retirement?
b) What would be the lump sum payment on his 36th birthday?
Purchase this Solution
Solution Summary
The solution provides the methodology and the formulas to complete the calculations for the solution.
Purchase this Solution
Free BrainMass Quizzes
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.