Finance (Engineering Economics)
posted by Chase .
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.

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.
Respond to this Question
Similar Questions

Finance
You are now 30 years old. You plan to retire in 30 years, and expect to live for 30 years after retirement, that is, until you are 90. You want a fixed retirement income that has the same purchasing power at the time you retire as … 
MBA Finance
Sally has won the grand prize in a lottery and must choose between the following three options: A. Receive a lump sum payment of $10,000,000 B. Receive annual end of year payments $2,000,000 for the next 8 years: C. Receive annual … 
FINANCE
you want to retire in 30 years. You intend to invest $200 per month into a mutual fund that you expect to return 12% per year (1% monthly). If you continue making these monthly investments for 30 years, what amount of money will you … 
math
Earl Watkins is ready to retire and has saved up $250,000 for that purpose. He places all of this money into an account which will pay him annual payments for 20 years. How large will these annual payments be if the account earns 17% … 
math
Earl Watkins is ready to retire and has saved up $250,000 for that purpose. He places all of this money into an account which will pay him annual payments for 20 years. How large will these annual payments be if the account earns 17% … 
Finite Math and Applied Calculus
Betty Sue sets up a retirement account. For the first 35 years, she deposits $500 at the end of each month into an account with an annual interest rate of 3.6%, compounded monthly. Then, she stops making monthly payments and transfers … 
Math
Earl Watkins is ready to retire and has saved up $250,000 for that purpose. He places all of this money into an account which will pay him annual payments for 20 years. How large will these annual payments be if the account earns 17% … 
finance
You want to buy an apartment priced at $300,000. You have saved a deposit of $30,000. The bank has agreed to lend you the $270,000 as a fully amortising loan with a term of 25 years. The interest rate is 12% pa and is not expected … 
Corporate Finance
A 15year annuity pays $1,750 per month, and payments are made at the end of each month. If the interest rate is 10 percent compounded monthly for the first seven years, and 6 percent compounded monthly thereafter, what is the present … 
Finance
You want to be able to withdraw $25,000 from your account each year for 20 years after you retire. If you expect to retire in 25 years and your account earns 7% interest while saving for retirement and 6.7% interest while retired Round …