Accumulate retirement money

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You are currently 30 years old and planning to retire in the Bahamas at the age of 65. Upon retirement (i.e. at the age of 65) you will buy a house there for $250,000. You will also need the equivalent of $400,000 at age 65 to afford the living expenses during the retirement years. You currently have $7,500 in your bank account which you received as gift from your father. You expect to have an average annual rate of 5%. You plan to make annual payments with the first payment today and the last one on your 65th birthday, on top of your father's gift to accumulate your retirement money. How much is your annual payment?

Reference no: EM132575079

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