Adams fellow graduate, Jenna, has been trying to decide how much of her new salary she could save for retirement. Jenna is considering putting $2,750 of her monthly savings in a stock fund. She just turned 22 and has a long way to go until retirement at age 63, and she considers this risk level reasonable. The fund she is looking at has earned an average of 6.25% over the past 15 years and could be expected to continue earning this amount, on average. While she has no current retirement savings, eight years ago Jennas grandparents gave her a new 30-year U.S. Treasury bond with a $20,000 face value with 4.5% semiannual coupons.

Jenna wants to know her retirement income if she both (1) sells her Treasury bond at its current market value and invests the proceeds in the stock fund and (2) saves an additional $2,750 at the end of each year in the stock fund from now until she retires. Once she retires, Jenna wants those savings to last until she is 96.

5. Suppose Jennas Treasury bond has a coupon interest rate of 4.5%, paid semiannually, while current Treasury bonds with the same maturity date have a yield to maturity of 3.00 % (expressed as an APR with semiannual compounding). If she has just received the bonds 16th coupon, what is the value of Jennas Treasury Bond today?

6. Suppose Jenna sells the bond, reinvests the proceeds, and then saves as she planned. If, indeed, Jenna earns a 6.25% annual return on her savings, how much could she withdraw each year in retirement? (Assume she begins withdrawing the money from the account in equal amounts at the end of each year once her retirement begins.)

Jenna's retirement income if she sells her T-bonds with face value identified beloy and invests the proceeds in the stock market at a return identified beloy and saves an additional amo in a stock fund for 12 years. Jenna wants those retirement savings to last to the age specified in the data tab $20,000 his information to solve the data case in addition to other information in th 4.50% 3T0Z 22 $2,750.00 6.25% 22 T-Bond Face 'alue Coupon Rate Current YTET Remaining Term on T-Bond in te Annual Investment in stock fund Annual Return on Stock Fund Jenna's current age 1 Desired retirement age Planned life expectancage in Jenna's expected annual salary increases for @7 Inflation Rate for Q7 Current Coca-Cola Stock Price Coca-Cola Annual Dividend (jus Cocal-Cola Expected Dividend C 631 96 3.25% 2.75% 53.18 $1.60 17 Quarties 5 (12, VL tirthe value today of the Truvery Box Coupon Rate Semiannual Pmt Pino Terme Quartie (12 Trearury Band PV Annualinvartment instack fund Number of years Jennarave money (years) Number of years of uithdrawal (years) Return onstack fund (r ) Stop 1: FVerzuing from age 22-63 Step 2: Annual withdrawalamnunk beginnin 90 64 Hint- Ste 1: Find hou much money will Jenngrove by the timerherotirar. Step 2: Once you knou hou much Jenneroverby retirement, thir will become Jenna's PV at that aq.. Find payment (uithdraual) Jonna qotr each year in retirement