Using the Time Value of Money charts provided,answer the following question.(Note to Instructors: Provide the appropriate tables to students from Personal Finance,Sixth Edition,Appendix C: Financial Tables.) Jack is 35 years old and is planning to retire at age 65.Based on a variety of factors,he is planning a retirement of 20 years.Jack determines that he will need $20,000 per year during his 20 years of retirement.If he can invest at 9%,how much will he need to save each year beginning today to reach his goal?
A) $11,428.57
B) $6,086.00
C) $1,339.47
D) $20,000.00

Question

Quizplus · Accepted Answer

To find out how much Jack needs to save each year, we use the Present Value of an Annuity formula to determine the total amount needed at retirement, and then use the Future Value of an Annuity formula to find the annual savings required. The calculations show that Jack needs to save approximately $1,339.47 each year.

Using the Time Value of Money Charts Provided,answer the Following