Posted by **Chase** on Wednesday, April 4, 2012 at 11:06am.

You wish to retire at 60 and, at the end of each month thereafter for 25 years, to receive $6,000. Assume that you begin making monthly payments into an account at age 23 and continue these payments until age 60. If the annual interest rate is constant at 12 percent, how much must be deposited monthly between ages 23 and 60 for you to receive your $6,000/month for 25 years? Assume monthly compounding throughout.

I am having difficulty with this problem because once you reach the age of 60, the sum of money you have saved between 23 and 60 (whatever amount that is) keeps accruing interest (at 1 % percent a month) while you you withdraw $6000 a month. I don't know how to find the sum of money you need to save between 23 and 60.

- Finance (Engineering Economics) -
**bobpursley**, Wednesday, April 4, 2012 at 11:16am
1. calculate the Present worth of those monthly payments of 6K for 25 years. That will be the nest egg you need at age 60.

2. calculate the future value of the monthly payments beginning at age 23 and ending at age 60 (37 years?).

Now your question. If you have a nest egg at 60, its future value is automatically calculated as you had figured in 1) above.

## Answer This Question

## Related Questions

- Finance - Assume that you are 23 years old and that you place $3,000 year-end ...
- FINANCE - you want to retire in 30 years. You intend to invest $200 per month ...
- Finite Math and Applied Calculus - Betty Sue sets up a retirement account. For ...
- Finance - You are now 30 years old. You plan to retire in 30 years, and expect ...
- Corporate Finance - A 15-year annuity pays $1,750 per month, and payments are ...
- Math - John is a 45 year old and wants to retire at age 65. He wishes to make ...
- Finance - You are 45 years of age and your asporation is to retire in 17 years ...
- finance - You wish to retire in 12 years and currently have $50,000 in a savings...
- Finance - You wish to retire in 12 years and currently have $50,000 in a savings...
- MBA Finance - Sally has won the grand prize in a lottery and must choose between...

More Related Questions