Calculating the present value.
Suppose you retire at age 70, with a life expectancy of 20 more years, and you expect to spend $55,000 a year during your retirement. How much money do you need to save by age 70 to support this consumption plan? Assume an interest rate of 7%.
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Solution Summary
This solution is comprised of a simple explanation of how to calculating present value of an investment.
$2.19