Major information is missing from this question.
1. Is this a perpetuity? That is, does the $25,000 come from a fund that keeps
earning 4% per year in interest?
2. Is this a life annuity? Then you will need mortality tables, which are not standard
( the probability of a 65 year old from Canada to live to 95 is not the same as
the prob of a 65 year old from Somalia)
3. No age is given for the start of the 15 year period of deposits.
etc
you want to be able to withdraw 25,000 from your account each year after your retire. you expect to retire in 15 years.
If your account earns 4% interest, how much will you need to deposit each year until retirement to achieve your retirement goal?
1 answer