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After retirement, you expect to live for 24 years. You would like to have $75,000 income each year. How much should you have saved in your retirement account to receive this income, if the annual interest
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25 votes
25 votes
After retirement, you expect to live for 24 years. You would like to have $75,000 income each year. How much should you have saved in your retirement account to receive this income, if the annual interest rate is 9 percent per year

User Stfn
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1 Answer

20 votes
20 votes

Answer:

The amount that you should have saved in your retirement account to receive this income is:

= $727,995.88.

Step-by-step explanation:

a) Data and Calculations:

Expected lifespan = 24 years

Expected annual income = $75,000

Interest rate per year = 9%

The amount of savings in the retirement account to receive this income is calculated from an online financial calculator as follows:

N (# of periods) 24

I/Y (Interest per year) 9

PMT (Periodic Payment) 75000

FV (Future Value) 0

Results

PV = $727,995.88

Sum of all periodic payments = $1,800,000.00

Total Interest = $1,072,004.12

User Tikia
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