If your friend is celebrating her 35th birthday today and wants to start saving for her anticipated retirement at age 65. She wants to be able to withdraw $105,000 from her savings account on each birthday for 20 years following her retirement; the first withdrawal will be on her 66th birthday. Your friend intends to invest her money in the local credit union, which offers 7% interest per year. She wants to make equal annual payments on each birthday into the account established at the credit union for her retirement fund.
(Questiona) If she starts marking these deposits on her 36th birthday and continues to make deposits until she is 65 (i.e. the last deposit will be on her 65th birthday), what amount must she deposit annually to be able to make the desired withdrawals as retirement?
(Questionb) Suppose your friend has decided to make one lump sum payment on her 35th birthday to cover her retirement needs. What amount does she have to deposit? (6 marks)
(Question C) Suppose your friend
If your friend is celebrating her 35th birthday today and wants to start saving for her anticipated retirement at age 65. She wants to be able to withdraw $105,000 from her savings account on each birthday for 20 years following her retirement; the first withdrawal will be on her 66th birthday. Your friend intends to invest her money in the local credit union, which offers 7% interest per year. She wants to make equal annual payments on each birthday into the account established at the credit union for her retirement fund.
(Questiona) If she starts marking these deposits on her 36th birthday and continues to make deposits until she is 65 (i.e. the last deposit will be on her 65th birthday), what amount must she deposit annually to be able to make the desired withdrawals as retirement?
(Questionb) Suppose your friend has decided to make one lump sum payment on her 35th birthday to cover her retirement needs. What amount does she have to deposit? (6 marks)
(Question C) Suppose your friend
