SOLUTION: You want to be able to withdraw $45,000 from your account each year for 15 years after you retire. You expect to retire in 25 years. If your account earns 5% interest, how mu

Algebra ->  Equations -> SOLUTION: You want to be able to withdraw $45,000 from your account each year for 15 years after you retire. You expect to retire in 25 years. If your account earns 5% interest, how mu      Log On


   

Question 1183396: You want to be able to withdraw $45,000 from your account each year for 15 years after you retire.
You expect to retire in 25 years.
If your account earns 5% interest, how much will you need to deposit each year until retirement to achieve your retirement goals?
Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
using the financial calcuator at https://arachnoid.com/finance/index.html, i get the following:





duplicating the analysis in excel and showing the year by year figures, i get the following:





the first thing i did was find the present value of 15 payments of 40,000 taken at the beginning of each time period.

the present value was 490,438.84.

the second thing i did was find the payments at the end of each time period for 25 year that would give me a future value of 490,438.85.

those payments were 10,275.90.

the first analysis is in the first display.
the second analysis is in the second display.

the third and fourth displays show the year by year remaining balances in the account.

the first 25 years is dep0siting 10,275.90 at the end of each year into the account for 25 years.

the second display is withdrawing 45,000 at the beginning of each year from the account for 15 years.