SOLUTION: You want to be able to withdraw $25,000 from your account each year for 15 years after you retire. You expect to retire in 20 years. If your account earns 8% interest, how mu

Question 1195623: You want to be able to withdraw $25,000 from your account each year for 15 years after you retire.
You expect to retire in 20 years.
If your account earns 8% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?
$
Round your answer to the nearest cent.
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
P = PMT * [1 - [ (1 / 1+r)^n] / r]; it is annual, so r doesn't have to be divided by anything
=25000[1-(1/1.08^15}/0.08]
=$213,986.97 needed.
round at end,
On calculator, do 1.08^15, take the reciprocal, subtract from 1 and divide by 0.08. Then multiply by $25000
Now that needs to be equal to m(1+.08)^20-1/0.08
multiply through by 0.08 so that $17118.96=m(3.6610)
m=$4676.16, the annual payment
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