Bill, age 45 wants to retire at age 60. He currently earns $60,000 per year. His goal is to replace 80% of his preretirement income. He wants the retirement income to be adjusted for inflation. Bill has an investment portfolio valued at $150,000 which is currently earning 10% average annual returns. Bill expects inflation to average 3% and based on his famly health, predicts he will live to age 90. Bill is currently saving7%of his gross income at each year-end and expects to continue this level of savings. Bill wants to ignore any Social Security benefits for purpsoes of retirment planings.

1) What will Bill's annual needs be at age 60?

2) Will the need be for an ordinary annuity or anannuity due?

3) How much total capital will Bill need at age 60?

4) How much capital will Bill have at 60?

5) WIll Bill have enough income at retirement?