Vanessa Wants to Retire in 25 Years with Enough Saved

Multiple Choice

Vanessa wants to retire in 25 years with enough saved to be able to withdraw $5,000 monthly for 20 years. She has already accumulated $48,000 in her investment account. Assume that the rate of interest is 4.8% compounded annually for the 25 years of her contributions, and changes to 3.6% compounded monthly for the next 20 years. Determine what annual contributions she has to make for the next 25 years in order to meet her objective.

A) $38,449.13
B) $22,923.85
C) $20,202.68
D) $18,468.85
E) $15,066.33