Morgan Weatherspoon, a super salesman contemplating retirement on his fifty-fift

Question

Morgan Weatherspoon, a super salesman contemplating retirement on his fifty-fifth birthday, decides to create a fund on an 10% basis that will enable him to withdraw $18,140 per year on June 30 beginning in 2021 and continuing through 2024. To develop this fund, Morgan intends to make equal contributions on June 30 of each of the years 2017-2020. Click here to view factor How much must the balance of the fund equal on June 30, 2020, in order for Morgan to satisfy his objective? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to o tables decimal places, e.g. 458,581.) Balance of the fund equal on June 30, 2020 LINK TO TEXT VIDEO: SIMILAR EXERCISE Click here to vi What are each of Morgan's contributions to the fund? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) Morgan's contributions to the fund

Explanation / Answer

1)

Balance of the fund equal on June 30,2020 = Annual Withdrawal*PVIFA(10%,4)

Balance of the fund equal on June 30,2020 = 18140*3.16987

Balance of the fund equal on June 30,2020 = 57501

2)

Morgan's Contributions to the fund = Total Amount needed in future/FVIFA(10%,4)

Morgan's Contributions to the fund = 57501/4.64100

Morgan's Contributions to the fund = 12390

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