What effect would increase in the rate

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You plan to retire in exactly 20 years. Your goal is to create a fund that will allow you to receive $23,000 at the end of each year for the 35 years between retirement and death? (a psychic told you that you would die exactly 35 years after you? retire). You know that you will be able to earn 11?% per year during the 35?-year retirement period.

A) How large a fund will you need when you retire in 20 years to provide the 35-year, $23,000 retirement annuity?

B) How much will you need today as a single amount to provide the fund calculated in PART A if you earn only 9% per year during the 20 years preceding retirement?

C) What effect would an increase in the rate you can earn both during and prior to retirement have on the values found in PARTS A and PARTS B?

D) Now assume that you will earn 10% from now through the end of your retirement. You want to make 20, end of year deposits into your retirement account that will fund the 35-year stream of $23,000 annual annuity payments.How large do your annual deposits have to be?

Reference no: EM131933583

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