a-1. With a 3.0% inflation rate (Spreadsheet 21.2), by how much would your retirement annuity grow if you increase the savings rate by 1.3%? (Round your answer to 2 decimal places.)

Growth in retirement annuity %

a-2. Is the benefit greater in the face of inflation?

	Yes
	No

SPREADSHEET 21.2 A real retirement plan e cel Please visit us at www.mhhe.com/bkm Retirement Years Income Growth Rate of Inflation Savings Rate ROR ROR 0291 07 Income 15 Savin Deflator Cumulative Savings rConsu ion 50,000 53,500 70,128 137,952 271,372 533,829 500 15,975 61.658 308,859 943,477 2,457,518 1.03 1.16 1.56 44,150 51,419 75,264 110,167 161,257 49,668 31 35 8,025 10,51 20,693 40,7 80,074 19 39 40 2.81 Total 1,116,851 1Retirement Years Income Growth Rate of Inflation Savings Rate ROR E2-C2y(1+C2 rConsumption 25 Age 07 03 Cumulative Savings B4-D4yC4 E4 (1+SE$2 +05 B5-D5 -B4 (1+$B$2) C4 (1+$C$2)B5 $D$2 31 65 Total 40 PMT $FS2,SA$2,-$ES39/$C$39,0,0 SUM(B4:B39 SUM(D4:D39) Real Annult SPREADSHEET 21.2 A real retirement plan e cel Please visit us at www.mhhe.com/bkm Retirement Years Income Growth Rate of Inflation Savings Rate ROR ROR 0291 07 Income 15 Savin Deflator Cumulative Savings rConsu ion 50,000 53,500 70,128 137,952 271,372 533,829 500 15,975 61.658 308,859 943,477 2,457,518 1.03 1.16 1.56 44,150 51,419 75,264 110,167 161,257 49,668 31 35 8,025 10,51 20,693 40,7 80,074 19 39 40 2.81 Total 1,116,851 1Retirement Years Income Growth Rate of Inflation Savings Rate ROR E2-C2y(1+C2 rConsumption 25 Age 07 03 Cumulative Savings B4-D4yC4 E4 (1+SE$2 +05 B5-D5 -B4 (1+$B$2) C4 (1+$C$2)B5 $D$2 31 65 Total 40 PMT $FS2,SA$2,-$ES39/$C$39,0,0 SUM(B4:B39 SUM(D4:D39) Real Annult