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BANG Limited are the manufacturer of interior doors. An analysis of some key

You are trying to calculate how much money you should have at retirement. On your 55 th birthday you will retire and immediately make your first withdrawal of $4,615.38. You plan to make 26 such withdrawals each year. You plan to continue withdrawing at that level and frequency until you are 90 years old. (Assume beginning of period withdrawals with the first withdrawal on your retirement date and no withdrawal on your final birthday.) During retirement, your savings will earn only 3.5% per annum. How much do you have to have saved at retirement to fund these planned withdrawals? (Calculate to two decimal places.)

 

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Expert Solution

You are trying to calculate how much money you should have at retirement.

 

SOLUTION:

 

Given:

First withdrawal amount = $4615.38

Number of withdrawals from age 55(n) = 26

Annual return during retirement (r) = 3.5%

 

The amount you have saved at retirement to fund these planned withdrawals = $80683.83.

 

The amount you have saved at retirement to fund these planned withdrawals =$80683.83.

 

Junaid answered 1 year ago
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