KitKat Singh is currently 30 years old and he plans to retire early,in 25 years' time.He would like to have an income of $50,000 per year during his retirement,which he anticipates will last for another 30 years.Assume that he receives the retirement income at the end of each of the 30 years.
Required:
Determine the amount of money he will need to have accumulated by the time he starts his retirement.Assume a discount rate of 5%.

Question

Quizplus · Accepted Answer

The Answer is

\begin{array}{ll} ext { Expected annual benefits earned per year of service } & \$ 50,000 \\ ext { PVFA }(5 \%, 30)& \underline{ imes 15.37245} \\ ext { Assets required to fund payments during retirement } & \underline{\$ 768,623}\end{array}

Using BAII Plus financial calculator: 30N,5 I/Y,50000 PMT,CPT PV

KitKat Singh Is Currently 30 Years Old and He Plans