Case Scenario: Your brother is 55 years old now and his current savings declined to $500000 and he does not feel this is sufficient ,so he works for another 10 years to retire at age 65.He expects to live for another 20 years after he retires he wants to have $100000 to live on each of the 20 years ,the first payment occuring at the time of retirement at 65 years. He will the recieve an additional payment each year for more 19 years . His account will pay 5% annually.
Q1. How much he should accumulated into his account on the date of retirement 65 to be able to make payments ?
Q2. How much must he put aside each of next 10 years to achieve this if the payments are made at the end of year starting on his 56 th birthday and his $500000 is still safe.
Q3. Assume that yours brother is only 45 and he has 20 years to make payments before retiring .how much would he have had to put aside each of the 20 years to achieve his retirement goal?The payments are made at the end of the year starting on 46 th birthday.