How much do you have to save per year

Reference no: EM131928088

Question: You are 40 years old and want to retire at age 70. Each year, starting one year from now, you will deposit an equal amount into a savings account that pays 7.3% interest. The last deposit will be on your 70th birthday. On your 70th birthday you will switch the accumulated savings into a safer bank account that pays only 4.5% interest. You will withdraw your annual income of $110,000 at the end of that year (on your 71st birthday) and each subsequent year until your 100th birthday. On that birthday you want to give $650,000 to your children. How much do you have to save each year to make this retirement plan happen? How much do you have to save per year during your working years in order to achieve your retirement goal? $ (Round to the nearest cent.)

Reference no: EM131928088

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