How much money do you need to save every end

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Reference no: EM132466198

You also wish to leave an estate for your children for about $1million at the time of your death. What is the expected lump sum you need at the beginning of your retirement year, including your first payment?

Hint: Use PV to calculate for the lump sum of estate and then add this value to your calculated value of #2

4) How much money do you need to save every end of the year today, if you can get the rate

of return during this period before your retirement to be 9% per year for the next 23 years.

a) If you have no savings to start with Hint: Use annuity formula to find annual payment, where the FV value is the value you calculated from part 3

b) You have a saving of $250k today Hint: Use annuity formula to find annual payment, but with PV of $250k in the formula

c) You will receive a benefit of $400k at retirement Hint: Use annuity formula to find annual payment, but with FV of $400k subtracted from your original FV value from part a in the formula

d) You have a saving of $200k today and will receive a benefit of $450k at retirement Hint: Use annuity formula to find annual payment, but with FV of $450k subtracted from your original FV value from part a in the formula and the PV of $200k adjusted in the formula as well.

Reference no: EM132466198

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