Your Father,who Is 60,plans to Retire in 2 Years,and He

question 128

Multiple Choice

Your father,who is 60,plans to retire in 2 years,and he expects to live independently for 3 years.Suppose your father wants to have a real income of $40,000 in today's dollars in each year after he retires.His retirement income will start the day he retires,2 years from today,and he will receive a total of 3 retirement payments.Inflation is expected to be constant at 5 percent.Your father has $100,000 in savings now,and he can earn 8 percent on savings now and in the future.How much must he save each year,starting today,to meet his retirement goals?

• A) $1,863
• B) $2,034
• C) $2,716
• D) $5,350
• E) $6,102

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Definitions:

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