Determine how much you need in order to retire comfortably

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Reference no: EM131830089

You are trying to determine how much you need in order to retire comfortably. You would like a monthly retirement income that has the same purchasing power on your retirement date that $8,000 per month has today. You recognize that inflation will continue during your retirement, but to make you calculations simple, all you require is that you have this purchasing power on the day you retire. Your retirement checks will be constant during your retirement. You anticipate that inflation will average 3.0% per year with annual compounding between now and when you retire. You anticipate living for 30 years in retirement. The first retirement check will come at the end of your first month of retirement. You expect to earn 9.0% on your investments. You have 35 years until you retire. You have already saved $20,000. How much must you save at the end of each month between now and the day you retire, with your first savings deposit in one month, in order to fund your retirement?

a. $794.22 b. $849.82 c. $953.07 d. $2,273.73 e. $6,857.14

Reference no: EM131830089

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