Question

Sam Salvetti is planning to retire in 15 years. Money can be deposited at 10% compounded quarterly. What quarterly deposit must be made at the end of each quarter until Sam retires so that he can make a withdrawal of $4600 semiannually over the first five years of his retirement? Assume that his first withdrawal occurs at the end of six months after his retirement. Answer:

Answer 1

1 saving period 2 retiremtn period 3 rate 4 quarterly rate 5 half yearly rate 15 years 5 years 10% yearly 2.50% 5.00% 7 total present value at the time of retirement 8 lie. The present value of all 5 years half yearly withdrals 10 present value $35,519.98 12 this present value is the future value for saving purpose 13 pmt $261.19

15 years 1 saving period 2 retiremtn period 3 rate 4 quarterly rate 5 half yearly rate years yearly 0.1 =+B3/4 =+B3/2 6 7 total present value at the time of re 8 ie. The present value of all 5 years 9 10 present value =PV(B5,5*2,-4600,0) 12 this present value is the future valu 13 pmt =PMT(B4,15*4,,-B10,0)

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