Question

Jason plans to retire in 35 years and live 30 years after his retirement. He will...

Jason plans to retire in 35 years and live 30 years after his retirement.

  • He will save $10,000 every year, starting from next year until his retirement (i.e. 35 years from today).
  • After retirement, Jason wants to make 30 annual withdrawals. The withdrawals are the same over years. The first withdrawal will be made in the first year after his retirement.
  • The annual interest rate is 5%, which applies the whole time to his retirement account.

How much can Jason withdraw each year after his retirement?

Hints:

  1. Draw the timeline correctly
  2. Calculate how much Jason will accumulate by the time of his retirement
  3. Calculate how much Jason can withdraw each year after his retirement
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Answer #1

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ANS 1 : 903203.07

ANS 2 : 58754.66

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