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

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 1 year ago

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