Retirement Planning: We’ve decided, $100,000 annual salary is adequate to live c

Question

Retirement Planning:
We’ve decided, $100,000 annual salary is adequate to live comfortably today (2011). Our estimated date of retirement is 38 years from now (2049). Retirement benefit will last 20 years (starting on 2049 and ends 2069) with 20 annual payments. Expected interest rate/return on investment/required rate return is 10% while inflation expected to be 3% annually for the entire period (2010-2068).

What will be the annual retirement benefit of 2049 providing similar purchasing power of 2011?

Explanation / Answer

firstly u need to calculate the FV for 100,000 with N = 38 yrs & I = 3%. that will give u a value of 307,478.34. it means that u require to get 307,478 everyyear once u retire if u wish to live at the same way as now (this becomes ur annual benefit in 2049)

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.