How much money will be in your retirement account

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Reference no: EM133121949

You accepted a new job with starting salary of $52,000 per year. The salary is expected to increase 4% each year. Now it is time to make a retirement plan for the next 39 years you expect to work. Your retirement fund has an annual interest rate of 5%, and You plan to deposit 10% of your annual salary into the account. (Hint: Be sure to move all values to the same point in time for equivalency.)

a) How much money will be in your retirement account at the end of 39 years? (Hint: this is a geometric gradient problem)

b) How much can you with draw from that account each year in retirement for 25 years. Assume you will withdraw the same amount each year. (Hint: this is a uniform annuity problem)

Reference no: EM133121949

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