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After retirement, you expect to live for 25 years. You would like to have $75,000 income each year. How much should you have saved in your retirement account to receive this income if the annual interest rate is 9 percent per year? (Assume that the payments start one year after your retirement.)

Respuesta :

Answer:

$736,693.47

Explanation:

Data provided in the question

Time period = 25 years

Annual income per year = $75,000

Annual interest rate = 9%

So by considering the above information, the amount saved in your retirement account i.e present value is shown below:

= Annual income per year × annuity factor at 9% for 25 years

= $75,000 × 9.82258

= $736,693.47

Refer to the annuity factor table

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