Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 72.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 72.0 when he fully retires, he will begin to make annual withdrawals of $170,683.00 from his retirement account until he turns 92.00. After this final withdrawal, he wants $1.84 million remaining in his account. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 9.00% interest rate. ( round to 2 decimal places).
year starts at 26 years of Derek
92-26 = 66 years
Derek wants Fv = 1840000
Preset value of 1840000 for 66 years = 6232.60
Draws 170683 for 19 years from 73 to 92
PV(170683) for 19 years from 73 to 92 = 29578.29
total present value required = 6232.60+29578.29= 35810.89
contribution periodically = 3233.93 yearly
Future Value: $10,572,151.93
| PV (Present Value) | $35,810.84 | ||||||||||||||
| N (Number of Periods) | 66.000 | ||||||||||||||
| I/Y (Interest Rate) | 9.000 | ||||||||||||||
| PMT (Periodic Deposit) | $3,233.93 | ||||||||||||||
| Starting Amount | $0.00 | ||||||||||||||
| Total Periodic Deposits | $213,439.38 | ||||||||||||||
| Total Interest | $10,358,712.55
Future Value: $10,572,151.93
|
Finally Derek Gets = $ 1840000
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