6. You are planning to retire in forty years. You will be spending $25,000 per year, starting at the end of year 41. Assume you will live fo

Question

6. You are planning to retire in forty years. You will be spending $25,000 per year, starting at the end of year 41. Assume you will live for 25 years after retirement and the annual interest rate is 5%. (a) What is the present value of your total spending

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Raelynn 2 weeks 2021-11-17T15:55:17+00:00 1 Answer 0 views 0

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    2021-11-17T15:57:04+00:00

    Answer:

    $352357 (Approx)

    Step-by-step explanation:

    Given:

    Payment per year = $25,000

    rate of interest = 5% = 0.05

    Number of Payment = 25  

    Present value = ?

    Computation:

    Present Value = PMT [\frac{1-(1+i)^{-n}}{i}] \\= 25000 [\frac{1-(1+0.05)^{-25}}{0.05}]\\ = 25000[\frac{1-(1.05)^{-25}}{0.05}]\\=25000[\frac{1-0.2953}{0.05} ]\\=25000[\frac{0.70471418}{0.05} ]\\=25000[14.0942837]\\=352,357.093

    Therefore , present value is $352357 (Approx)

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45:7+7-4:2-5:5*4+35:2 =? ( )