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Your current income is​ $50,000 per​ year, and you would like to maintain your current standard of living​ (i.e., your purchasing​ power) when you retire. If you expect to retire in 30 years and expect inflation to average​ 3% over the next 30​ years, what amount of annual income will you need to live at the same comfort level in 30​ years?

Respuesta :

TomShelby

Answer:

it will need income for 121,363.12

Explanation:

We will adjust the 50,000 principal by inflation at 3% per year during 30 years:

[tex]Principal \: (1+ r)^{time} = Amount[/tex]

Principal 50,000.00

time 30.00

rate 0.03000

[tex]50000 \: (1+ 0.03)^{30} = Amount[/tex]

Amount 121,363.12

An income for 121,363.12 per year in 30 years will have the same purchasing power as 50,000 dollars today.

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