Sub: Finance Topic: Time Value of Money
Calculation of amount required in retirement considering time value.
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You are 40 years old and plan to retire in exactly 20 years. Starting 21 years from now you will need to
withdraw $5,000 per year from your retirement fund to supplement your social security payment. If you
expect to live to age eighty-five how much should you place in the retirement fund each year for the
next 20 years to reach your retirement goal, assuming you can earn 12% per year on your retirement
fund investment? Show your formulas and input