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Please work on EXCEL sheet Upon retirement, you want to have enough money to provide an...

Please work on EXCEL sheet

Upon retirement, you want to have enough money to provide an income of $5,000 per month for 35 years. Given a return of 8.0%, how much money will you need at retirement?

Please work on EXCEL sheet

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Answer #1
PV of annuity for making pthly payment
P = PMT x (((1-(1 + r) ^- n)) / i)
Where:
P = the present value of an annuity stream P
PMT = the dollar amount of each annuity payment $       60,000 5000*12
r = the effective interest rate (also known as the discount rate) 8.30% ((1+8%/12)^12)-1)
i=nominal Interest rate 8.00%
n = the number of periods in which payments will be made 35
PV of annuity= PMT x (((1-(1 + r) ^- n)) / i)
PV of annuity= 60000*(((1-(1 + 8.30%) ^- 35)) /8%)
PV of annuity= $703,966.69
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