Planning for retirement in exactly years

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Mickie and Minnie (M&M) are planning for retirement in exactly 30 years. At the beginning of each retirement year for 26 years, M&M want to be able to withdraw $64,000 in "real" dollars.

M&M currently have savings of $66,000.

In addition, M&M want to be able to withdraw $43,000 (real $s) in 12 years and 16 years to pay toward college costs for their 2 children.

Until retirement, M&M expect to earn a real return of 7.7% per annum on their investments. After retirement, they plan to move to saver investments that are expected to earn a real return of 4.9% per annum.

What yearly amount must they deposit (for each year of the 30 years) in real dollars to meet their financial goals, first deposit at the end of the year?

Reference no: EM131444245

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