There are two steps here: first calculate the present value of your annuity and then figure out what it will be when you retire, the FV of that PV.
b. Assume you plan to inherit $100,000 in 30 years.
If you wait 10 years from now to start saving $500 per
month, will you still have the same amount to retire? (6
pts.)
If you take the $100,000 and invest it for the remaining 15 years, you will have:
So you will have considerably less.
c. If you want to retire in 25 years with the
same amount of money as in (a), how much will you have to
save each month? (5 pts.)
So the moral is start saving early!