You wish to have $10,000 per year as a retirement supplement for 20 years (from age 65-85).You are now 40 years old.How much must you save each year for the next 25 years if you assume your savings will earn 12% annually?

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The correct answer is A. $560.17.To calculate the present value of the future retirement supplement, we can use the formula:PV = FV / (1 + r)^nwhere:PV is the present valueFV is the future valuer is the annual interest raten is the number of yearsIn this case, we have:FV = $10,000r = 12%n = 20Plugging these values into the formula, we get:PV = $10,000 / (1 + 0.12)^20PV = $10,000 / 13.686PV = $730.94This is the amount of money that we need to have saved by the time we retire in order to generate $10,000 per year for 20 years.To calculate how much we need to save each year for the next 25 years, we can use the formula:PMT = PV * (r / ((1 + r)^n - 1))where:PMT is the annual paymentPV is the present valuer is the annual interest raten is the number of yearsIn this case, we have:PV = $730.94r = 12%n = 25Plugging these values into the formula, we get:PMT = $730.94 * (0.12 / ((1 + 0.12)^25 - 1))PMT = $730.94 * (0.12 / 10.384)PMT = $560.17Therefore, we need to save $560.17 each year for the next 25 years in order to have $10,000 per year as a retirement supplement for 20 years.

You Wish to Have $10,000 Per Year as a Retirement