In: Finance
A man is planning to retire in 20 years. He wishes to deposit a regular amount every three months until he retires, so that, beginning one year following his retirement, he will receive annual payments of $60,000 for the next 15 years. How much must he deposits if the annual interest rate is 6% compounded quarterly? (Note that the last deposit is made on the date of the end of 20th year, and first withdrawal is at the end of 21st year.) Draw cash flow diagram.
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
Cell reference -
Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.