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KengaRu [80]
3 years ago
14

How much must you deposit each year into your retirement account starting now and continuing through year 12 if you want to be a

ble to withdraw $70,000 per year forever, beginning 35 years from now? Assume the account earns interest at 10% per year.
Business
1 answer:
Vesnalui [34]3 years ago
3 0

Answer:

$2,583

Explanation:

The required value of your account at year 35 is:

$70,000 / 0.1 = $700,000

FV = $700,000. This is the required amount you need to have in your account 35 years from now

i/r = 10%. The interest that the account pays

n = 35 years

PV = 0

PMT (The amount of annual deposit required to achieve the target above. This is the missing value we need to calculate)

By using financial calculator, we obtain:

PMT = $2,583

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  • credit of $30,000, overapplied.

<h3>Underapplied Overhead vs. Overapplied Overhead</h3>

Underapplied overhead is the opposite of overapplied overhead. Overapplied overhead occurs when expenses incurred are actually less than what a company accounts for in its budget. This means that a company comes in under budget and achieves a lower amount of overhead costs during the accounting period.

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