After retirement,you expect to live for 25 years.You would like to have $75,000 income each year.How much should you have saved in your retirement account to receive this income if the interest rate is 9% per year? (Assume that the payments start one year after your retirement.)
A)$736,693.47
B)$83,431.17
C)$1,875,000
D)$1,213,487.12

Question

Quizplus · Accepted Answer

The present value of an annuity formula is used to calculate the amount needed: PV = PMT × [(1 - (1 + r)^-n) / r], where PMT = $75,000, r = 0.09, and n = 25. This calculation results in approximately $736,693.47.

After Retirement,you Expect to Live for 25 Years