Assume you want to retire early at age 52. You plan to save using one of the following two strategies: (1) save $2,700 a year in an IRA beginning when you are 27 and ending when you are 52 (25y ears) or (2) wait until you are 37 to start saving and then save $4,500 per year for the next 15 years. Assume you will earn the historic stock market average of 10% per year.

1.	How much out-of-pocket cash will you invest under the two options?
2.	How much savings will you have accumulated at age 52 under the two options?
3.	Explain the results.
4.	If you let the savings continue to grow for 10 more years (with no further out-of-pocket investments), under each scenario, what will the investment be worth when you are age 62?

Future Value of Annuity of $1
Periods	1%	2%	3%	4%	5%	6%	8%	10%	12%	14%	16%	18%	20%
Period 1	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000	1.000
Period 2	2.010	2.020	2.030	2.040	2.050	2.060	2.080	2.100	2.120	2.140	2.160	2.180	2.200
Period 3	3.030	3.060	3.091	3.122	3.153	3.184	3.246	3.310	3.374	3.440	3.506	3.572	3.640
Period 4	4.060	4.122	4.184	4.246	4.310	4.375	4.506	4.641	4.779	4.921	5.066	5.215	5.368
Period 5	5.101	5.204	5.309	5.416	5.526	5.637	5.867	6.105	6.353	6.610	6.877	7.154	7.442
Period 6	6.152	6.308	6.468	6.633	6.802	6.975	7.336	7.716	8.115	8.536	8.977	9.442	9.930
Period 7	7.214	7.434	7.662	7.898	8.142	8.394	8.923	9.487	10.089	10.730	11.414	12.142	12.916
Period 8	8.286	8.583	8.892	9.214	9.549	9.897	10.637	11.436	12.300	13.233	14.240	15.327	16.499
Period 9	9.369	9.755	10.159	10.583	11.027	11.491	12.488	13.579	14.776	16.085	17.519	19.086	20.799
Period 10	10.462	10.950	11.464	12.006	12.578	13.181	14.487	15.937	17.549	19.337	21.321	23.521	25.959
Period 11	11.567	12.169	12.808	13.486	14.207	14.972	16.645	18.531	20.655	23.045	25.733	28.755	32.150
Period 12	12.683	13.412	14.192	15.026	15.917	16.870	18.977	21.384	24.133	27.271	30.850	34.931	39.581
Period 13	13.809	14.680	15.618	16.627	17.713	18.882	21.495	24.523	28.029	32.089	36.786	42.219	48.497
Period 14	14.947	15.974	17.086	18.292	19.599	21.015	24.215	27.975	32.393	37.581	43.672	50.818	59.196
Period 15	16.097	17.293	18.599	20.024	21.579	23.276	27.152	31.772	37.280	43.842	51.660	60.965	72.035
Periods	1%	2%	3%	4%	5%	6%	8%	10%	12%	14%	16%	18%	20%
Period 1	0.990	0.980	0.971	0.962	0.952	0.943	0.926	0.909	0.893	0.877	0.862	0.847	0.833
Period 2	1.970	1.942	1.913	1.886	1.859	1.833	1.783	1.736	1.690	1.647	1.605	1.566	1.528
Period 3	2.941	2.884	2.829	2.775	2.723	2.673	2.577	2.487	2.402	2.322	2.246	2.174	2.106
Period 4	3.902	3.808	3.717	3.630	3.546	3.465	3.312	3.170	3.037	2.914	2.798	2.690	2.589
Period 5	4.853	4.713	4.580	4.452	4.329	4.212	3.993	3.791	3.605	3.433	3.274	3.127	2.991
Period 6	5.795	5.601	5.417	5.242	5.076	4.917	4.623	4.355	4.111	3.889	3.685	3.498	3.326
Period 7	6.728	6.472	6.230	6.002	5.786	5.582	5.206	4.868	4.564	4.288	4.039	3.812	3.605
Period 8	7.652	7.325	7.020	6.733	6.463	6.210	5.747	5.335	4.968	4.639	4.344	4.078	3.837
Period 9	8.566	8.162	7.786	7.435	7.108	6.802	6.247	5.759	5.328	4.946	4.607	4.303	4.031
Period 10	9.471	8.983	8.530	8.111	7.722	7.360	6.710	6.145	5.650	5.216	4.833	4.494	4.192
Period 11	10.368	9.787	9.253	8.760	8.306	7.887	7.139	6.495	5.938	5.453	5.029	4.656	4.327
Period 12	11.255	10.575	9.954	9.385	8.863	8.384	7.536	6.814	6.194	5.660	5.197	4.793	4.439
Period 13	12.134	11.348	10.635	9.986	9.394	8.853	7.904	7.103	6.424	5.842	5.342	4.910	4.533
Period 14	13.004	12.106	11.296	10.563	9.899	9.295	8.244	7.367	6.628	6.002	5.468	5.008	4.611
Period 15	13.865	12.849	11.938	11.118	10.380	9.712	8.559	7.606	6.811	6.142	5.575	5.092	4.675