Kit Fox is the finance manager at Builtrite and she just noticed that one employee-Terry Dactel-has a guaranteed 25 year pension annuity which will pay him $42,000 annually for 25 years. Terry will be retiring in 20 years. Kit also noticed that no funds have been set aside for Terry's retirement. Once the employee retires, the retirement pension account typically earns 4% annually and company deposits into the fund (before the employee retires) are invested in mutual funds which have been earning 9% annually. How much will Kit Fox need to deposit each year in order to fund Terry Dactel's retirement? O $12,825 O $22,346 O $28,671 $24,411

Kit Fox is the finance manager at Builtrite and she just noticed that one employee-Terry Dactel-has a guaranteed 25 year pension annuity which will pay him $42,000 annually for 25 years. Terry will be retiring in 20 years. Kit also noticed that no funds have been set aside for Terry's retirement. Once the employee retires, the retirement pension account typically earns 4% annually and company deposits into the fund (before the employee retires) are invested in mutual funds which have been earning 9% annually. How much will Kit Fox need to deposit each year in order to fund Terry Dactel's retirement? O $12,825 O $22,346 O $28,671 $24,411

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 43P

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