FIN
FIN 2520
You are 30 years old today. You wish to retire at age 65.
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Question

You are 30 years old today. You wish to retire at age 65. How much money must you deposit at the end of each year

so that when you retire at age 65, you will be able to withdraw $2,500 at the end of each month until age 85?

Assume you can earn interest at the rate of 5.5% compounded daily during the entire period from age 30 to 85.


I know i need to use the present value of an ordinary annuity, but when i enter the formula into excel i keep getting a result of about 44,420, whereas i know i should be getting a value of about 360,000 for the age of 65.

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