Although you are young, you are already thinking about retirement. You have decided you want to retire in 25 years from now. You want to live on a retirement of $90,000 per year. You figure you will live about 45 years on that retirement (you work-out on a regular basis, and live a healthy lifestyle). While on retirement, you think you can earn 6% on investments. We will work through this problem a step at a time.
My question is this: Does the question "How much wil you have to have in "'the bank' at retirement if you wanted to withdraw $90,000 per year over 45 years of retirement, assuming the balance is earning 6% per year (compounded annually)? Indicate that you are finding present value or future value.