calculations or figures used for N, I/Y, PV, FV, Pmt. Indicate if you are using ordinary annuity or Annuity Duc mode. You can use notes and textbook, and other resources. Part 1: At age 42, John plans to retire at age 65 and live to age 90. He earns $80,000 per year. In retirement, he expects to need $64,000/year. He estimates annual inflation will be 3% and expects to earn 9.5% annually on his investments. According to is Social Security benefit statement he will receive $18,000 per year (regularly adjusted for inflation). How much does he need to save by retirement? (answer to step 3) Assume all interest rates and percentages compound on a monthly basis, Calculate the Wage Replacement Ratio: (step 1) Retirement need in today's dollars Social Security he'll receive Amount needed from savings in today's dollars (wage replacement needed) He will start withdrawing money at the beginning of his 65th year. He will make deposits at the end of each month. Assume he is just starting to save for retirement. Part 2: 2nd part of the question. Calculate the monthly deposits he will need to make for this plan. (answer to step 4) Suppose John had already saved $60,000 for retirement what would his monthly contributions be then? Part 1: (steps two and three be sure to convert everything to months) N N I/Y I/Y PV PV Pmt Pmt FV FV Part 2: (step 4) $0 saved N (step 4) $60,000 saved N I/Y I/Y PV PV Pmt Pmt FV FV calculations or figures used for N, I/Y, PV, FV, Pmt. Indicate if you are using ordinary annuity or Annuity Duc mode. You can use notes and textbook, and other resources. Part 1: At age 42, John plans to retire at age 65 and live to age 90. He earns $80,000 per year. In retirement, he expects to need $64,000/year. He estimates annual inflation will be 3% and expects to earn 9.5% annually on his investments. According to is Social Security benefit statement he will receive $18,000 per year (regularly adjusted for inflation). How much does he need to save by retirement? (answer to step 3) Assume all interest rates and percentages compound on a monthly basis, Calculate the Wage Replacement Ratio: (step 1) Retirement need in today's dollars Social Security he'll receive Amount needed from savings in today's dollars (wage replacement needed) He will start withdrawing money at the beginning of his 65th year. He will make deposits at the end of each month. Assume he is just starting to save for retirement. Part 2: 2nd part of the question. Calculate the monthly deposits he will need to make for this plan. (answer to step 4) Suppose John had already saved $60,000 for retirement what would his monthly contributions be then? Part 1: (steps two and three be sure to convert everything to months) N N I/Y I/Y PV PV Pmt Pmt FV FV Part 2: (step 4) $0 saved N (step 4) $60,000 saved N I/Y I/Y PV PV Pmt Pmt FV FV
