Answer:
$ 5,507.47
Explanation:
There are two steps involved in solving this question ,first we need to determine the present of annuity of $31,000 receivable per year after retirement at retirement date,then use that to calculate the annual contribution:
=-pv(rate,nper,pmt,fv)
rate is the rate of interest during retirement which is 14%
nper is the period during which the $31000 would be received which is 20
pmt is the $31000 annuity per year
fv is the future worth of the annuity which is unknown
=-pv(14%,20,31000,0)=$ 205,317.05
The present value above is the future value of the retirement contributions
annual contribution=pmt(rate,nper,pv,-fv)=pmt(12%,15,0, 205317.05) =$ 5,507.47
