3 You have saved $325,000 for retirement in your bank account. 4 To further improve your retirment savings you will open a money market account on your 50th birthday. 5 The account earns 4.23% PYCY 6 You propose to place some additional money in the account starting with your 55th birthday and ending on you 64th birthday. 7 You belive you can increase the amount saved every year by 3% to beat inflation 3 Starting on your 65th birthday you will withdraw $55,000 9 Each year you will increase your withdrawl by 4% to counter inflation O Your last payment will be on you 80th birthday. 2 Answer these questions - Provide you excel solution and show your work. 3 Points 4 30 A. How much will you need to deposit on your 55th birthday to make this plan work? 5 10 B. What does it mean (how do you know) that the plan is working. What tells you that the solution is correct? 6 12 C. You can only deposit $15000 on your 55th birthday. What interst rate will you need to earn to still make the same withdrawls? 7 12 D. If you can ONLY get 4.23% interest and ONLY deposit $15,000 on your 55th birthday, what amount must you start at on withdrawls? If you can ONLY get 4.23% interest and ONLY deposit $15,000 on your 55th Birthday AND you still want to draw out $55,000 on your 65th Birthday. What rate of increase can you use on the withdrawls? You will only get 4.23% interst and can only deposit $15,000 on birthday 55. You still want to draw out $55,000 on birthday 65 and increase by 4%. At what rate will you have to increase your deposits? You can only deposit $15,000 on your 55th birthday. You still get the 4.23% rate and deposit $15000 on your 55th birthday. You will increase deposits by 3% and withdrawls by 4%. If you want to leave $100,000 for your son, what amount will you need to start with on your 50th birthday. E. 3 You have saved $325,000 for retirement in your bank account. 4 To further improve your retirment savings you will open a money market account on your 50th birthday. 5 The account earns 4.23% PYCY 6 You propose to place some additional money in the account starting with your 55th birthday and ending on you 64th birthday. 7 You belive you can increase the amount saved every year by 3% to beat inflation 3 Starting on your 65th birthday you will withdraw $55,000 9 Each year you will increase your withdrawl by 4% to counter inflation O Your last payment will be on you 80th birthday. 2 Answer these questions - Provide you excel solution and show your work. 3 Points 4 30 A. How much will you need to deposit on your 55th birthday to make this plan work? 5 10 B. What does it mean (how do you know) that the plan is working. What tells you that the solution is correct? 6 12 C. You can only deposit $15000 on your 55th birthday. What interst rate will you need to earn to still make the same withdrawls? 7 12 D. If you can ONLY get 4.23% interest and ONLY deposit $15,000 on your 55th birthday, what amount must you start at on withdrawls? If you can ONLY get 4.23% interest and ONLY deposit $15,000 on your 55th Birthday AND you still want to draw out $55,000 on your 65th Birthday. What rate of increase can you use on the withdrawls? You will only get 4.23% interst and can only deposit $15,000 on birthday 55. You still want to draw out $55,000 on birthday 65 and increase by 4%. At what rate will you have to increase your deposits? You can only deposit $15,000 on your 55th birthday. You still get the 4.23% rate and deposit $15000 on your 55th birthday. You will increase deposits by 3% and withdrawls by 4%. If you want to leave $100,000 for your son, what amount will you need to start with on your 50th birthday. E