Question

You plan to retire at 67 and would like to have enough money in your retirement account for yearly withdrawals of $17,000 over 30 years. Assuming you are able to earn a yearly rate of return of 7% in your retirement account during the 30 years of your retirement what must be the approximate balance in your account when you turn 67?

Note: Please enter your answer to the nearest dollar?

Answer 1

$ 210,954

Balance in retirement account must be the present value of future cash flows which is calculated as follows:
Present value of cash flows	=	Annual cash flow	*	Present value of annuity of 1
	=	$       17,000	*	12.40904
	=	$   210,954
Working:
Present value of annuity of 1	=	(1-(1+i)^-n)/i	Where,
	=	(1-(1+0.07)^-30)/0.07	i	=	7%
	=	12.4090412		n	=	30