Answered step by step
Verified Expert Solution
Question
1 Approved Answer
answer a) $761.45 b) $57,360.07 15. Sanchez is eligible to receive retirement benefits of $901.01 at age 65, but decides to start receiving them when
answer
15. Sanchez is eligible to receive retirement benefits of $901.01 at age 65, but decides to start receiving them when he turns 60 instead. This incurs a 36% penalty on his benefits. By taking his retirement benefits at age 60, he will realize a monthly saving of $184.80 in retirement fund contributions. Both the benefits and contributions savings are expected to rise monthly by 0.15%. He will contribute the sum of these two amounts into his RRSP, which earns 7.35% compounded monthly until age 65, when he retires. In retirement, he will use the accumulated savings, which are expected to earn 4.5% compounded quarterly, to top up his retirement benefit payments to his pre-penalty amount. The monthly benefits are expected to rise monthly by 0.15%. a. Calculate the total of the monthly benefits and savings at age 60. b. Calculate the future value of the monthly savings and benefits at age 65 a) $761.45
b) $57,360.07
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started