Problem:
Mr. Horace, aged 25, has $25,000 cash to invest for his retirement. In addition, he plans to save and invest $8,000 per year (at the end of every year) for the next 40 years, at which time he will be 65 and retire. He plans to spend $55,000 per year (at the end of each year) after his retirement. He expects that he will live until age 90. The rate of interest is 6% per year.
a) How much money will he have at the end of 40 years?
b) Will he have enough money to support his retirement spending? Show your calculation.
c) If he dies at the age of 85, will he have any money left for his estate? If yes, how much?
Additional Information:
This question is belongs to Finance as well as it explains about computing retirement benefits and pension plans for a person who wants to invest in retirement.