7. Suppose you planned on retiring in 40 years. Although youd like to be extremely rich, you estimate that if you retired today youd be comfortable living on $80,000 per year. You also estimate that the annual rate of inflation over that period of time will be 4%. What must be your nominal income in the year of your retirement to produce the desired standard of living?

8. Refer to question 7. Assume that a retired person today, with the same qualifications that you will have when you retire, would get $18,000 annually from Social Security, and that S.S. payments would increase at the same rate as inflation. What would be the nominal income in the year of your retirement needed to produce your desired standard of living that youd have to provide for yourself?

9. Refer to questions 7 & 8. Suppose that you expect to live 30 years after your retirement and estimate that you could receive a net average annual rate of return on your investments of 6%. What sort of nest egg must you have in order to produce that (after Social Security) income? (Remember, youll be drawing down the income to zero while also earning interest.)

10. Refer to the above questions. If your home could presently sell for $250,000, what could you sell it for in the year of your retirement. (Assume that it will appreciate at exactly the rate of inflation).

Thank you!