Answer to Question #176135 in Finance for Sandeep

Question #176135

Assume that your father is now 55 years old and plans to retire after 5 years from now. He is expected to live for another 15 years after retirement. He wants a fixed retirement income of Rs. 1,00,000 per annum. His retirement income will begin the day he retires,

5 years from today, and then he will get 14 additional payments annually. He expects to earn a return on his savings @ 10% p.a., annually compounding. How much (to the nearest of rupee) must your father save today to meet his retirement goal?

Expert's answer

P = Amount required annually = 100000

n = 15 years

r = return = 10%

Amount required at retirement 

The amount required at retirement is =836668.7457

Calculation of Annual savings:

n = 5 years

r = annual return = 10%

Let P = Annual Savings required


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