According to the Seton Hall Career Center, finance majors from the Stillman School of Business earned an average salary of approximately $60,000 in their first year after graduation. Assume that this will be your salary after graduation. If you earn a 3% raise, what will be your salary the second year on the job? What will be your salary in the fifth year?

Assume you start working when you are 20 years old1 and work through age 65 (i.e., you work until the day before you turn 66). What will be your 45th and final salary?

According to financial planners, the average retiree requires approximately 70% of their last years working salary each year to live comfortably in retirement. Assume that you want to earn a fixed amount of interest each year in retirement. Your goal is to spend only the interest and still live comfortably; thus, you will be able to spend the same amount of money each year forever. Assume you retire at age 66 and can earn a 6% return on your retirement savings. How much must you have saved to live only off the interest?

Suppose you live through age 90. How much money will you be able to bequeath (i.e. pass on in your will)?

Suppose instead, you plan to spend all your savings in retirement (i.e. the day before you turn 91, you expect to have run out of money). a. How much will you have needed to save to live comfortably in retirement if you can earn a 6% return on your savings? b. What about if you can only earn a 5% return on your savings?

Suppose instead of ensuring you have enough money to last through your lifetime, you decide to spend $200,000 per year in retirement. How long until you run out of money?

Assume you plan to leave nothing when you pass away, and you can earn a 6% return on your investment. a. If you start saving for retirement at age 25, how much will you need to save each year to meet your savings goal? b. If you start saving for retirement at age 35, how much will you need to save each year to meet your savings goal?