question archive Troy and Kristy Reynolds (both currently 56) have determined that they will require retirement income equal to $93,000 in today's dollars, based on their current income
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Troy and Kristy Reynolds (both currently 56) have determined that they will require retirement income equal to $93,000 in today's dollars, based on their current income. They plan to retire in 8 years and wish to assume an after-tax return on their investments, prior to retirement, of 8%. They plan to readjust their assets after retirement and believe that their net return will drop to 6%. Troy's parents are both in their late eighties, and Kristy's parents are in their seventies. Troy and Kristy assume that retirement will last for 30 years, and that inflation will average 2%
4.If the Reynolds wanted to leave a specific bequest to their favorite charity (Wounded Warrior Project) in the amount of $2million (actual donation at death), how much additional capital would they need to have accumulated at the time they retire at age 64?
Additional Capital Required for Charity
Fv Amount to be left after 30 years $2,000,000
Rate Return during retirement 6%
Nper Number of Years 30
PV Additional Capital
required at retirement $348,220
(Using PV function of excel with Rate=6%, Nper=30, Fv=-2000000)
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