TVM Retirement Problem.
Facts: A man would like to have a lifestyl in their retirement that is equivalent to $75,000 in today's dollars. They plan to retire in 30 years. Their retirement should last for 25 years. Annual inflation is 4%. All earnings will be taxed at the 20% marginal income tax rate each year. The account offers an APY of 8% annually.
1. How much money will the man need in 30 years to live the same lifestyle as $75,000 dollars?
2. How much money will they need in their account on the day they (30 years from today) to be able to fund their retirement years?
3. How much money does the man need to contribute each month for the next 30 years to reach his retirement goal?