If an individual has a person financial goal of accumulating $1,000,000 by the a

Question

If an individual has a person financial goal of accumulating $1,000,000 by the age of 65 in order to be financially independent, travel, and enjoy spending time with family and friends, how much per year needs to be invested if the person starts at the following ages and the expected annual return is 10%

a) age 25

b)age 35

c) age 40

d)age 50

e) how much annual income will $1,000,000 provide for an individual at age 65 if he or she purchases a 20 year single premium annuity at age 65 which guarantees 4%

Explanation / Answer

e) how much annual income will $1,000,000 provide for an individual at age 65 if he or she purchases a 20 year single premium annuity at age 65 which guarantees 4% let the annual income be x

x =1000000/pvifa(4%,20)

x= 1000000/13.5903

x =73581.89 or 73582

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