Answer:
Your annual contribution=$87,809.24
Explanation:
Step 1: Determine total amount needed in retirement
Total amount=Expenditure per year×number of years after retirement
where;
Expenditure per year=$ 115,000
Number of years after retirement=(100-65)=35 years
replacing;
Total amount=(115,000×35)=$4,025,000
You need a total amount of $4,025,00 for your plan
Step 2: Determine contribution per year
The contribution per year is the same as principal amount per year
Total amount needed per year=4,025,000/(65-22)=93,604.65 per year
Using the formula
A=P(1+r)^n
where;
A=Future value per year=$93,604.65
P=unknown=p
r=6.6%=6.6/100=0.066
n=1
replacing;
93,604.65=p(1+0.066)^1
93,604.65=1.066 p
p=93,604.65/1.066
p=87,809.24
Your annual contribution=$87,809.24