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    Retirement Annuity and Annual Contributions

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    You wish to retire after 30 years, at which time you want to have accumulated enough money to receive an annuity of $60,000 a year for 22 years of retirement. During the period before retirement, you can earn 8% annually, and after retirement, you can earn 6% on your money.

    a) What annual contributions to the retirement fund will allow you to receive the $60,000 annually?
    b) What annual contributions are required if the contributions are made at the beginning of each year?

    Note: There are solutions within the database for this type of question however, each OTA uses a different formula to calculate and the answers appear to be different. I would like to know the steps I would take using a financial calculator.

    © BrainMass Inc. brainmass.com October 9, 2019, 11:23 pm ad1c9bdddf

    Solution Preview

    1. Set calculator to BGN from END
    Compute the present value of 60000 received at the beginning of a year for 22 years
    2. Press 2nd Clr TVM
    3. Input 60000 PMT
    4. Input 6% I/Y
    5. Input 22 ...

    Solution Summary

    This solution provides calculations for annual contributions.