Solution-Donate a constant amount of money

Donate a constant amount of money

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Reference no: EM133118606

You have just turned 30 years old, have just received your MBA, and have accepted your first job. Now you decide to put 10% of your annual salary into your savings account to meet your two objectives after retiring:

First, you would like to be able to retire 30 years from now with a retirement income of $80,000 per year for 30 years, with the first payment coming 31 years from today.
Second, you would like to donate a constant amount of money (use C to denote this constant payment) to the cancer research foundation every year. The donation runs forever and the first payment to the foundation comes also 31 years from today.

Assume that your starting salary is $ 85,000 per year. You will receive your first annual paycheck next year (when you are 31 years old) and it will grow 2% per year until you retire. How much can you donate to the cancer research foundation per year? (solve for C)

Use 7% as annual discount rate.

Reference no: EM133118606

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Donate a constant amount of money

Reference no: EM133118606

Reference no: EM133118606

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