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  3. you wish to retire in 18 years , at which time , y

You wish to retire in 18 years , at which time , you want to have...

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Advance Math

You wish to retire in 18 years , at which time , you want tohave accumulated enough money to receive an annuity of $500 monthlyfor 20 years of retirement. During the period before retirement youcan earn 4% annually,while after retirement you can earn 6 percenton your money. What monthly contributions to the retirement fundwill allow you to receive the 500 dollars annuity?

Answer & Explanation Solved by verified expert
4.2 Ratings (534 Votes)
First we need to find the present value to be required to withdraw of 500 monthly for 20 years at the rate of 6 We can find by using the present value formula Pmt Periodic payment 500 i interest rate per period 6 6100 006 compounded    See Answer
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