Determine the annual deposit for two withdrawal plans

Reference no: EM131004396

Cheryl and Gunther wish to place into a retirement fund an equal amount each year for 20 consecutive years to accumulate just enough to withdraw $24,000 per year starting exactly one year after the last deposit is made. The fund has a reliable return of 8% per year.

Determine the annual deposit for two withdrawal plans:

(a) forever (years 21 to infinity);

(b) 30 years (years 21 through 50).

(c) How much less per year is needed when the withdrawal horizon decreases from infinity to 30 years?

Reference no: EM131004396

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