SOLUTION: You are 23 years old. You want to provide income for your retirement years. You would like to receive $2,500 monthly from the time you are 65 years old until you reach the age of

First, I will determine how much money X should be accumulated on the account from my starting age of 23 years to the time I am 65 yeras old,
in order for to have enough to withdraw $2500 each month from my 65 years until I reach the age of 90.


From 65 years until I reach 90 years, there are (90 -65) = 25 years = 25*12 months = 300 months.


By withdrawing $2500 each month, my acount (the remaining money) still earns 2.45% annualy compounded monthly,

so everything works as an Annuity saving plan with the negative deposit.


Thus the formula for remaining money is

M = ,     (1)


and, according to the condition, the account should be exausted after 25 years, i.e.

X =  = 663251 dollars.

Now I am in position to determine how much I should deposit each month from my age of 23 years to my 65 years (or, more precisely,
till the end of my 64-th year) to accumulate  663251 dollars in my account. The number of monthly periods is 12*(65-23) = 12*42 = 504.


It is the standard Annuity saving plan, and the formula is

663251 = ,     (2)


where D is the monthly deposit amount.


The multiplier   = 1369.14,  


which implies from equation (2)  that  D =  = 484.43.


It is your answer:  From yours 23 years till yours 65 years you should deposit $484.43 monthly to your account,

                    in order to have the income of $2500 monthly from yours 65 years until yours 90 years.