It is now February 1, 2049 and you have just retired.
To fully enjoy your retirement, you would like to be able to withdraw an amount from your account
of $75,000 for the first years of retirement.
You have accumulated vacation and sick leave which is added to your departure bonus
and which can cover your expenses for the first 3 years of retirement.
Then, the first withdrawal of $75,000 is made on February 1, 2052 and the last on February 1, 2059.
Thereafter, an amount of $40,000 per year will be sufficient until February 1, 2069.
The first withdrawal of $40,000 will be made on February 1, 2060 and the last on February 1, 2069.
Animal lover, you would also like to leave an amount of $1,000 per year (first payment on
1
January 1, 2065) in perpetuity at the local animal shelter for which you worked
volunteering all these years.
The assumed interest rate on your investments throughout your retirement is 5% per year.
b) How much money do you need to have amassed by the time you retire (the 1st
February 2049) to finance all these needs?