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How much save each year to meet financial objectives

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Mary just turned 55 years old today and plans on retiring in 20 years on her 75th birthday. She would like to withdraw money from her retirement account on her birthday each year until she dies. She would like to withdraw $100,000 on her 75th birthday, and increase her withdrawals $20,000 each year through her 84th birthday. She expects to die on her 85th birthday, at which time she would like to have $300,000 to cover her funeral expenses. Mary currently has $200,000 savings and expects to earn 9% per year. She plans to save an equal amount of money each year until her retirement. Her first deposit will be made today.

Question 1: How much would she have to save each year to meet her financial objectives?

Reference no: EM132462479

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