John, just celebrated his 19th birthday and wants to retire on his 45th birthday. He has just set up a plan to pay his income starting retirement day which will continue paying for 19 more years. John's goal is to get $120,000 each of the 20 yrs. In creating his account, John has set aside equal payments at the end of each year, for the next 25 years starting on his 20th birthday. If the annual interest rate is 9%, how big should John's equal payments be?

Question

nottim · Answer

...Annuities?

anonymous · Answer

Yes

nottim · Answer

Just plug, rearrange, and play, isn't it?

nottim · Answer

btw, wahtsthe anuuity formula? i forgot

anonymous · Answer

Not really sure if I should use the PV, FV, or Compounding annuity formula.

nottim · Answer

what's pv and fv?
And compunding annuity? that like compund interest? If so, DO NOT use that one

anonymous · Answer

PV is calculating the present value over multiple periods and future value is calculating the future value over multiple periods

nottim · Answer

don't they use the same formula as annuity?

anonymous · Answer

One is the opposite. The formula for annuity takes some time, so we use excel, but i'm not sure what type do to solve this one.

nottim · Answer

i'd said annuity, but that's only cause i don't remember PV or RV