Question

Your friend is celebrating her 25th birthday today and wants to start saving for her anticipated retirement at age 65( she will retire on her 65th birthday). She woukd like to be able to withdraw $60,000 from her savings account on each birthday for at least 25 years following her retirement (the first withdrawl will be on her 66th birthday).

Your friend wants to invest her money in the local savings bank which offers 5.5% per year. She wants to make equal annual deposits on each birthday in the new savings account she will establish for her retirement fund. If she starts making these deposits on her 26th birthday and continues to make deposits until she is 65 (the last deposit will be on ber 65th birthday)

b.what amount must she deposit annually to be able to make the desired withdrawls upon retirement ?

7,855.57

none of the above

5,546.04

11,111.07

5,891.68

Answer 1