Problem:
IRA Investments develops retirement programs for individuals. You are 30 years old and plan to retire on your 60th birthday. You want to establish a plan with IRA that will require a series of equal, annual, end-of-year deposits into the retirement account. The first deposit will be made 1 year from today on your 31st birthday. The final payment on the account will be made on your 60th birthday. The retirement plan will allow you to withdraw $120,000 per year for 15 years, with the first withdrawal on your 61st birthday. Also at the end of the 15th year, you wish to withdraw an additional $250,000. The retirement account promises to earn 12 percent annually.
What periodic payment must be made into the account to achieve your retirement objective?