Retirement Annuity and Annual Contributions
Not what you're looking for?
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.
Purchase this Solution
Solution Summary
This solution provides calculations for annual contributions.
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 ...
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Motivation
This tests some key elements of major motivation theories.