Question
In: Finance
Input Current age 25 Retirement age &
| Input | ||||
| Current age | 25 | |||
| Retirement age | 60 | |||
| Number of years until retirement | 35 | |||
| Annual withdrawal ($) | 120,000 | |||
| Number of years to withdraw | 20 | |||
| Interest rate (%) | 6.00% | |||
| Employer contribution ($) | 5,000 | |||
| Trust fund distribution ($) | 150,000 | |||
| Age at trust fund distribution | 45 | |||
| Years until distribution | 20 | |||
| Calculation & Output | ||||
| Present value of withdrawals | ||||
| Question 4 | ||||
| Annual deposit until retirement | ||||
| Question 5 | ||||
| Present value in lump sum | ||||
| Question 6 | ||||
| Value of employer's contribution at retirement: | ||||
| Value of trust fund at retirement: | ||||
| Amount required at retirement | ||||
| Annual deposit until retirement |
Solutions
Expert Solution
|
Input |
||||
|
Current age |
25 |
|||
|
Retirement age |
60 |
|||
|
Number of years until retirement |
35 |
|||
|
Annual withdrawal ($) |
120,000 |
|||
|
Number of years to withdraw |
20 |
|||
|
Interest rate (%) |
6.00% |
|||
|
Employer contribution ($) |
5,000 |
|||
|
Trust fund distribution ($) |
150,000 |
|||
|
Age at trust fund distribution |
45 |
|||
|
Years until distribution |
20 |
|||
|
Calculation & Output |
||||
|
Present value of withdrawals |
Using PV function in MS excel |
pv(rate,nper,pmt,fv,type) |
PV(6%,20,120000,0,0) |
($1,376,390.55) |
|
Question 4 |
||||
|
Annual deposit until retirement |
Using PMT function in MS excel |
pmt(rate,nper,pv,fv,type) |
PMT(6%,35,0,1376390.55,0) |
($12,351.53) |
|
Question 5 |
||||
|
Present value in lump sum |
Using present value function in MS excel |
pv(rate,nper,pmt,fv,type) |
PV(6%,35,0,1376390.55,0) |
($179,075.59) |
|
Question 6 |
||||
|
Value of employer's contribution at retirement: |
Using Future value function in MS excel |
fv(rate,nper,pmt,pv,type) |
FV(6%,35,-5000,0,0) |
$557,173.90 |
|
Value of trust fund at retirement: |
Using Future value function in MS excel |
fv(rate,nper,pmt,pv,type) |
FV(6%,15,0,-150000,0) |
$359,483.73 |
|
Amount required at retirement |
1376390.55-557173.9-359483.73 |
459732.92 |
||
|
Annual deposit until retirement |
Using PMT function in MS excel |
pmt(rate,nper,pv,fv,type) |
PMT(6%,35,0,459732.92,0) |
($4,125.58) |
jeff jeffy answered 3 years agoRelated Solutions
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