Question

A salesman with a marketing degree from the business school wants to retire at the age of 50. This is exactly 25.00 years from today. To retire at 50, the salesman believes he will need $4,057,827.00 in savings. He wants to start a mutual fund and will make annual payments into the fund. His first contribution will be today (annuity due) and his last contribution will be when he turns 49. (25.00 total payments). He thinks he can earn 6.00% per year on average on his invested funds.

What annual payment is required to reach his retirement goal? Answer format: Currency: Round to: 2 decimal places.

Suppose that the salesman delays the start of his mutual fund by 5 years. In other words, he will have 5 fewer contributions to his fund. What payment will allow him to reach his goal with this scenario? Answer format: Currency: Round to: 2 decimal places.

Answer 1