Question
In: Finance
Derek plans to retire on his 65th birthday. However, he plans to work part-time until he...
Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 75.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 75.0 when he fully retires, he will begin to make annual withdrawals of $160,071.00 from his retirement account until he turns 91.00. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 10.00% interest rate.
Please round answer to 2 decimal places. :)
Solutions
Expert Solution
contribution per month is 1090.92
A) first we calculated pv of his withdrawals at age 75
B) now we find pv of A at age 65
now we find yearly contribution using pmt function in excel
any doubts please comment
jeff jeffy answered 1 year agoRelated Solutions
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Derek plans to retire on his 65th birthday. However, he plans to
work part-time until he turns 70.00. During these years of
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day he turns 70.0 when he fully retires, he will begin to make
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withdrawals from his retirement account. Exactly one year after the
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work part-time until he turns 75.00. During these years of
part-time work, he will neither make deposits to nor take
withdrawals from his retirement account. Exactly one year after the
day he turns 75.0 when he fully retires, he will begin to make
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Derek plans to retire on his 65th birthday. However, he plans to work part-time until he...
Derek plans to retire on his 65th birthday. However, he plans to
work part-time until he turns 72.00. During these years of
part-time work, he will neither make deposits to nor take
withdrawals from his retirement account. Exactly one year after the
day he turns 72.0 when he fully retires, he will begin to make
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Derek plans to retire on his 65th birthday. However, he plans to work part-time until he...
Derek plans to retire on his 65th birthday. However, he plans to
work part-time until he turns 71.00. During these years of
part-time work, he will neither make deposits to nor take
withdrawals from his retirement account. Exactly one year after the
day he turns 71.0 when he fully retires, he will begin to make
annual withdrawals of $161,481.00 from his retirement account until
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Derek plans to retire on his 65th birthday. However, he plans to work part-time until he...
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work part-time until he turns 73.00. During these years of
part-time work, he will neither make deposits to nor take
withdrawals from his retirement account. Exactly one year after the
day he turns 73.0 when he fully retires, he will begin to make
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Derek plans to retire on his 65th birthday. However, he plans to work part-time until he...
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work part-time until he turns 75.00. During these years of
part-time work, he will neither make deposits to nor take
withdrawals from his retirement account. Exactly one year after the
day he turns 75.0 when he fully retires, he will begin to make
annual withdrawals of $128,885.00 from his retirement account until
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account from his 26th birthday...
Derek plans to retire on his 65th birthday. However, he plans to work part-time until he...
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work part-time until he turns 73.00. During these years of
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withdrawals from his retirement account. Exactly one year after the
day he turns 73.0 when he fully retires, he will begin to make
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withdrawals from his retirement account. Exactly one year after the
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Derek plans to retire on his 65th birthday. However, he plans to work part-time until he...
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work part-time until he turns 71.00. During these years of
part-time work, he will neither make deposits to nor take
withdrawals from his retirement account. Exactly one year after the
day he turns 71.0 when he fully retires, he will begin to make
annual withdrawals of $123,803.00 from his retirement account until
he turns 90.00. After this final withdrawal, he wants $1.88 million
remaining in his account. He...
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