Question

During retirement, Dr. David Williams expects to earn an annual...

During retirement, Dr. David Williams expects to earn an annual nominal rate of return of 9% (before tax and compounded annually) on her savings. She would like to draw an annual income of $35,000, at the beginning of each year, for 25 years, indexed for an annual 1.5% rate of inflation. How much money does Simone need to accumulate by her date of retirement to provide for her annual desired income?

1)$300,753.99

2)$343,686.75

3) $346,339.60

4)$423,048.93

Answer & Explanation
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The appropriate answer is 3) $346,339.60