Given
Amount required on retirement = $456000
Time for retirement = 30years
Amount to be obtained on inheritance after 5 years = $109000
Amount earned on depositing inheritance amount = Amount deposited FvF(6%,25y)
= $109000 4.2919 = $467817.1
Therefore amount earned on inheritance meets the required amount of retirement. No additional is required to save.
If the amount deposited is not compounded annually
Amount earned on deposit of inheritance = ($109000 6% 25y) + $109000 = $272500
Balance amount required = $456000 - $272500 = $183500
Amount required to save every year to earn $183500 after 30 years is
Future value = Annuity payment FvAF(6%,30y)
$183500 = Annuity payment 79.0582
Annuity payment = $2321.0748
Therefore amount required to save every year end for 30 years is $2321.0748 to earn $183500.
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