Annuity starting monthly after retirement (P) =
24,000.00
Time in months = (n) = 20*12= 240
interest rate per month (i) = 9?/12=
0.0075
Present Value of annuity formula =( P
*(1-(1/(1+i)^n))/i)
=24000*(1-(1/(1+0.0075)^240))/0.0075)
=2,667,478.90
So before retirement K2,667,478.90 would be required to provide
K24000 pension after retirement, it means after 30 years.
Amount is now Future value for today=
2,667,478.90
Time in months (n)=30*12= 360
interest rate per month (i) = 9?/12=
0.0075
Future value of annuity formula = P *{ (1+i)^n - 1 } /
i
2,667,478.90 =
P*(((1+0.0075)^360)-1)/0.0075
2,667,478.90 =P* 1830.743483
P= 1,457.05
So amount required to contribute each month is
K1,457.05
