1. How much money must you accumulate by retirement? (Hint: Find the present value of the $210,000 withdrawals.) 2. How does this amount compare to the total amount you will draw out of the investment during retirement? How can these numbers be so different? 3. How much must you pay into the investment each year for the first ten years? (Hint: Your answer from Requirement 1 becomes the future value of this annuity.) 4. How does the total out-of-pocket savings compare to the investment's value at the end of the ten-year savings period and the withdrawals you will make during retirement? You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to draw $210,000 per year for the next 30 years (based on family history, you think you'll live to age 70). You plan to save for retirement by making 10 equal annual installments (from age 30 to age 40) into a fairly risky investment fund that you expect will earn 14% per year. You will leave the money in this fund until it is completely depleted when you are 70 years old. (Click the icon to view the present value annuity table.) (Click the icon to view the future value annuity table.) (Click the icon to view the present value table.) (Click the icon to view the future value table.) To make your plan work answer the following questions: Click the icon to view the questions.) 1. How much money must you accumulate by retirement? (Hint: Find the present value of the $210,000 withdrawals.) Calculate the present value to find out how much money must be accumulated by retirement. (Round your answer to the nearest whole dollar.) The present value is $ 2. How does this amount compare to the total amount you will draw out of the investment during retirement? How can these numbers be so different? Over the course of your retirement you will be withdrawing $ However, by age 40 you only need to have invested These numbers are different because: O A. You need to have the same accumulated as you will withdraw because you will not earn further interest on your investment when you reach retirement O B. You need to have far less accumulated than what you will withdraw because you only withdraw a portion of the investment every yearthe balance remains invested where it continues to earn 14% interest. OC. You need to have far more accumulated than what you will withdraw because you will withdraw a large portion of the investment every yearthe balance remains invested where it continues to earn 14% interest. OD. None of the above. 3. How much must you pay into the investment each year for the first ten years? (Hint: Your answer from Requirement 1 becomes the future value of this annuity.) (Round your answer to the nearest whole dollar.) You must pay $ into the investment each year for the first ten years. 4. How does the total out-of-pocket savings compare to the investment's value at the end of the ten-year savings period and the withdrawals you will make during retirement? (Use the investment rounded to the nearest whole number that you calculated above, then round your final answer to the nearest whole dollar.) The total out-of-pocket savings amounts to $ This is far than the investment's worth at the end of ten years and remarkably than the amount of money you will eventually withdraw from the investment