Monday

April 21, 2014

April 21, 2014

Posted by **matt** on Wednesday, June 10, 2009 at 11:26am.

This problem must be broken into two parts to solve. First, the present value of the

retirement annuity must be calculated.

PV =

=

=

Now we need to calculate the annual savings required that will grow to this retirement

amount using the future value of an annuity table.

$333,540 =

=

$11,200 =

- accounting -
**Reiny**, Wednesday, June 10, 2009 at 11:37amI have to assume that the interest rate stays the same at 4% per annum

then

the "amount" of an annuity of 20 payments of $x = "present value" of an annuity of $30000 for 15 years

x(1.04^20 - 1).04 = 30000(1 - 1.04^-15)/.04

x(1.04^20 - 1) = 30000(1 - 1.04^-15)

x = 11201.25

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