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Assume you want to retire early at age 52 . You plan to save using one of the following two strategies: (1) save $5,100 a
Assume you want to retire early at age 52 . You plan to save using one of the following two strategies: (1) save $5,100 a year in an IRA beginning when you are 27 and ending when you are 52 (25 years) or (2) wait until you are 40 to start saving and then save $10,625 per year for the next 12 years. Assume you will earn the historic stock market average of 10% per year. (Click the icon to view the future value annuity factor table.) (Click the icon to view the future value factor table.) (Click the icon to view the present value annuity factor table.) (Click the icon to view the present value factor table.) Read the requirements. Requirement 1. How much out-of-pocket cash will you invest under the two options? Calculate how much out-of-pocket cash you will invest under the two options. Option 1
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