We are given that as part of your retirement plan, you want to set up an annuity in which a regular payment of $35,000 is made at the end of each year at rate of 6% compounded annually for 20 years

So first of all we need to find the future value of annuity using the formula as shown below :

$FV= p\frac{[(1+\frac{r}{n})^{(n)(t)}-1)]}{\frac{r}{n}}$

Here, FV = future value of annuity

p = $35000 (annual deposit)

r is rate = 6% = 0.06

n = number of compounding = 1 ( as we are compounding annually )

t = number of years = 20

So plugging in all the values in the formula , we get

$FV= 35000\frac{[(1+\frac{0.06}{1})^{(1)(20)}-1)]}{\frac{0.06}{1}}$

Simplifying further , we get

$FV= 35000\frac{[(1+0.06)^{20}-1)]}{0.06}$

Plugging in the given values in the calculator , we get

FV = $ 1287495.69

So far we have got the Total amount for annuity , from here we need to use the concept of compound interest and find the principal amount to be deposited to get the required total amount of $ 1287495.69

The formula for compound interest when compounded annually is given by:

$A=P(1+r)^t$

Here A = 1287495.69 (Total amount required)

P = ( principal amount to be deposited to meet the required total amount )

r = 6% = 0.06

t = 20

So plugging in all the known values in the formula , we get

$1287495.69= P(1+0.06)^{20}$

simplifying further, we get

$\frac{1287495.69}{(1.06)^{20}}= P$

so required amount to be deposited is given by :

P = $401,447.24

Hope it was helpful !:)

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3 years ago