Calculate the amount she will need to deposit today

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Your friend is celebrating her birthday and wants to start saving for retirement. She has provided you with the following information:

Years until retirement: 40

Amount to withdraw each year in retirement: $90,000

Years to withdraw in retirement: 20

Interest rate while saving: 8%

Interest rate in retirement: 3%

Saved today: $10,000

The first deposit will be made one year from today, and the last deposit will be made on the day she retires. Her first withdrawal will not take place until one year after she retires and she plans to spend her entire nest egg.
Suppose your friend has just inherited a large sum of money. Rather than making equal annual payments, she has decided to make one lump-sum deposit today to cover her retirement needs. She plans to spend what she has currently saved today on a new car. Calculate the amount she will need to deposit today to reach her retirement goal. (Enter a positive value and round to 2 decimals)

Reference no: EM132627194

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