Question

8. Assume that your father is now 50 years old, that he plans to retire in 10 years, and that he expects to live for 25 years after he retires, that is, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $40,000 has today (he realizes that the real value of his retirement income will decline year by year after he retires). His retirement income will begin the day he retires, 10 years from today, and then he will get 24 additional annual payment s. Inflation is expected to be 5% per year from today forward; he currently has $100,000 saved up; and he expects to earn a return on his savings of 8 % per year, annual compounding. How much must he save during each of the next 10 years (with deposits being made at the beginning of each year) to meet his retirement goal???

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

THERE ARE 2 EXCEL FORMATS FOR THE SUM : BOTH ARE GIVEN BY STUDENTS, SO I HAVE PRESENTED ONE OF THEM, IF THERE IS SOME CHANGE, LET ME KNOW, WILL PREPARE SECOND FORMAT AND GIVE IT TO YOU. THANK YOU