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How much money does suzie need to have in her retirement savings account today if she wishes to withdraw $42,000 a year for 25 years? she expects to earn an average rate of return of 9.75 percent?

Respuesta :

The money Suzie needed is $388,683.83.
To calculate this we use the following formula;
= 42,000 ×((1 - (1 / (1 + .0975)²⁵)) / .0975 
=42000 x (1 - (1/10.2355980492) / 0.0975
=42000 x (1 - 0.0976982483) / 0.0975
=42000 x (0.9023017517) / 0.0975
=37896.6735714 / 0.0975
= $388,683.83150153 
= $388,683.83

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