Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller

Exercise 127

Solve this application problems. Round to the nearest cent.
Ben Jamison is 45. He wants to retire at age 65 and draw $25,000 per year from his retirement plan until he turns 85. He assumes that he can earn 8% per year before retiring but that he would invest more conservatively and earn 6% per year after retiring. (a) Find the amount needed at 65 to fund his retirement. ____________ (b) Then find the end-of-the-year payment into a sinking fund needed to accumulate this amount. ____________