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    Retirement Planning

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    You wish to retire after 18 years, at which time you want to have accumulated enough money to receive an annuity of $14,000 a year for 20 years of retirerment. During the period before you can earn 11 percent annually, while after retirement you can earn 8 percent on your money. What annual contributions to the retirement fund will allow you to receive the $14,000 annually?

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    Solution Preview

    FV = 14, 000
    n = 18
    i = 11
    PV =

    After 18 years, you want to have 14,000 annually. First of all find the present value of the first 14000 today. Finding the present value of the first 14,000 enables you to know how much you need ...