FIN 419 - Week 3 Individual Assignment form the readings

P4-23 (LG-2/LG-3) Funding your retirement you plan to retire in exactly 20 years. Your goal is to create a fund that will allow you to receive 20,000 at the end of each year for the 30 years between retirement and death (a psychic told you would die exactly 30 years after you retire). You know that you will be able to earn 11% per year during the 30-year retirement period.

a. How large a fund will you need when you retire in 20 years to provide the 30-year, 20,000 retirement annuity?

n 30 r % PVIFA 30 periods, 11% Rate

Annuity 20,000 / Present value 173,876 20000 X

Answer 173,876 Retirement money required

b. How much will you need today as a single amount to provide the fund calculated...