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Constant rate of return on investment

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Reference no: EM132411077

Assume the following:

a. Constant rate of return on your investment, both before and during retirement, is 5.8%

b. Each year you will deposit/invest an equal amount for retirement.

c. The first deposit will be on your 23rd birthday

d. The last deposit will be made on your 65th birthday

e. Each year during retirement you will withdraw $129,805 to live on during the year (this is equivalent to $60,000 in today's dollars).

f. Your first withdraw will be on your 65th birthday (the same day you make your last deposit)

g. Your last withdrawal will be on your 91st birthday.  After this withdrawal, there should be $0 remaining in your investment account.

h. You plan to live one more year and die on your 92nd birthday.  Hopefully you will, because you have no money (otherwise, you'd have to move in with your children).

Beginning on your 23rd birthday, how much must you save annually to achieve your financial goal?  Solve manually with your calculator.

Reference no: EM132411077

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