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hi Sir,
I have a question on annuity. I have try to do it but don’t know if correct.
The question is:
Suppose you wish to retire forty years from today. You determine that you need $50,000 per year once you retire, with the first retirement funds withdrawn one year from the day you retire. You estimate that you will earn 6% per year on your retirement funds and that you will need funds up to and including your 25th birthday after retirement.
a) How much must you deposit in an account today so that you have enough funds for retirement?b) How much must you deposit each year in an account, starting one year from today, so that you have enough funds for retirement? (5 Marks)
Sorry – but neither of these questions could be asked in Paper F9.
(They are more Paper F2 questions, but would not even be asked in Paper F2)
Surely you have an answer in the same book in which you found the questions, and so by all means ask about which part of the answer you are not clear.
(If they are questions you have been set for homework, then we certainly don’t do your homework 🙂 )
well this question was from finance(finance reporting ) book but no answer,
I tried to the number one is 639167.80 second one 677517.87 . my understanding is the two question emphasis on when we shall do the payment.
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