Use the following information regarding your retirement planning: You plan to work (and save) for 35 years,...

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Finance

Use the following information regarding your retirementplanning:
You plan to work (and save) for 35 years, then retire (andspend money from your retirement account) for 25 years. After these60 years, you expect that your retirement saving account will have$50,000 left to give to your family.
You plan to save $4,000 in year 1, and you will increase thisamount by 3% a year
You want your retirement spending to increase by 2% peryear
You expect to earn a rate of return of 8% during your workingyears and 4.50% during retirement
To solve this problem, find the amount that you spend your firstyear of retirement.

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It has been assumed that first investment and first spending after retirement is done at year end Future value of growth annuity FV P1rn1gnrg Where Pfirst payment4000 rrate per period8 ggrowth rate3 nnoof period35 years FV 4000100835100335008003 400014785328139005 400011971505 40002394296 95771840 Amount in retirement fund after 35 years 9577184 Now his account will have 50000 after 25 years from retirement to give to his family PV of those 50000 at the time of retirement 50000PVAF4525 years 5000003327 1663500 PV of money which has been spend after retirement in 25 years at the time of retirement 9577184166359410834 Present value of growing annuity PV Prg11g1rn where Pfirst payment rrate per period45 ggrowth rate2 nnoof See Answer

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