You estimate you'll need $200,000 per year for 25 years starting on your 65^th birthday to live on during your retirement.Today is your 50^th birthday and you want to make equal deposits into an account paying 9% interest per year,the first deposit today and the last deposit on your 64^th birthday.How much must each deposit be (rounded to the nearest $10)?

Question

Quizplus · Accepted Answer

To find the amount of each deposit, we first calculate the present value of the retirement annuity needed at age 65. Then, we calculate the equal annual deposits needed from age 50 to 64 using the future value of an annuity formula. The correct calculation results in approximately $61,385 per deposit.

You Estimate You'll Need $200,000 Per Year for 25 Years