Professor Brain is going to work for the next 25 years and then retire. At the end of the 25th year he would like to withdraw 80,000 per year from an investment account until the end of the 50th year (26 withdrawals). At the end of the 51st year he would like to have 100,000 to leave to his heirs. He currently has 60,000 to start the investment account. The investement account pays 8% with monthly compounding. Brian would like to know how much he should invest in the account each month with the first payment to be made in 1 month and continuing until he retires at the end of the 25 year. Find what the monthly payments need to be.
Begin solution by drawing a picture of the timeline for this problem showin gthe deposits and the withdrawals.
1. Find solution to this problem using a hand held calculator
2. Create an excel spreadsheet to solve this problem