Gabriel is planning her retirement. One year from today, she will begin depositing the same...
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Gabriel is planning her retirement. One year from today, she will begin depositing the same fixed amount each year for the next 35 years into a retirement savings account. Starting one year after making her final deposit, she will withdraw $120,000 annually for each of the following 30 years (i.e. she will make 30 withdrawals in all). Assume that the retirement fund earns 9% annually over both the period that she is depositing money and the period she makes withdrawals. In order for Gabriel to have sufficient funds in her account to fund her retirement, how much should she deposit annually?
Periods
PV of 1
PV of Ordinary Annuity
PV of Annuity due
30
.07540
10.2737
11.1983
35
.04900
10.5668
11.5178
Periods
FV of 1
FV of Ordinary Annuity
FV of Annuity due
30
13.2676
136.3075
125.1354
35
20.4139
215.7108
197.9823
A.
$6,227
B.
$9,302
C.
$10,133
D.
$5,715
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