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Adam will retire in 10 years. He wants a fixed retirement income that has the same...

Adam will retire in 10 years. He wants a fixed retirement income that has the same purchasing power at the time he retires as $40,000 has today, and he plan to receive that fixed income for 25 years starts from the day he retires. Inflation rate is expected to be 5% for 10 years (ignore inflation after Adam retires). He currently has $100,000 in the 8% annual compounding rate savings. How much must Adam save during each of next 10 years (deposits being made the of each year) to meet his retirement goal ? ( the inflation rate is used only to calculate desired retirement income)

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Answer #1

Answer - Adam should save $36949.62 each year till next 10 years to reach his goal.

Nalu 46000 ela lo yo anu be- 40000 x 1.628874 62625 ,65155-79 Adem 10.628158282S 2 686009 56 Sot-Total-25-payo 6009.56 351165-35 a plunthe to Move yoy a chould be $15116535 ㄨ t 0.08)1 ㄧ 8%sh, tolal, tuha ewalin d savines blan be and hes Should be equal le-6000 (1:08) 10+14:48656-461 16525 eo ー 100140 X 2-168125 t l4,4866伐ーチ61165, 35, 2158925+ 144651165 35 14,486 562-555212: 85 535여2.85

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