QUESTION 17 2.5 points Save Answer Using the Time Value of Money charts provided

Question

QUESTION 17 2.5 points Save Answer Using the Time Value of Money charts provided, answer the following questionls). Note to Instrucfors: Provide the appropriate tables to students from Personal Finance, Fith Edition Appendix C: Financial Tables) Jack is 35 years old and is planning to retire at age 65 Based on a variety of factors, he is planning a retirement of 20 years. Jack determines that he will need $20,000 per year during his 20 years of retirement If he can invest at 9 percent, how much will he need to save each year beginning one year from today to reach his goa? $11,428 5 $608600 $1.339 4 $20,00000

Explanation / Answer

Ans:

If rate of Interest is compounded annually then the solution will be as follows :-

A = P (1+i)n

20000 = x *

20000 = x (1+4.23)

20000 = x (5.24)

x = 20000/5.24

= $ 3816.80

A = P (1+i)n

20000 = x *

(1+0.09)30

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