How much are the monthly contributions you must make

Reference no: EM133715975

Question: You are planning for retirement. You have $25,000 in the account today and want to put in an equal amount each month until retirement in 40 years. At that point, you plan to take annual payments of $150,000 for 30 years. You also expect to receive an inheritance of $50,000 20 years from today that you will add to this account.

You believe your investment will earn 8% during your investment years with monthly compounding and 5% during your retirement years. How much are the monthly contributions you must make to fund this plan? I have a solution that states the answer is $416.12 but I am unsure of how they got there.

Reference no: EM133715975

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