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Excel Online Structured Activity: Required Annuity Payments Assume that your father is now 50 years old, plans to retire in 10 years, and expects to

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Excel Online Structured Activity: Required Annuity Payments Assume that your father is now 50 years old, plans to retire in 10 years, and expects to live for 25 years after he retires - that is, until age 85 . He wants his first retirement payment to have the same purchasing power at the time he retires as $45,000 has today, He wants all his subsequent retirement payments to be equal to his first retirement payment. (Do not let the retirement payments grow with inflation: Your father realizes that if infiation occurs the real value of his retirement income will decline year by year after he retires). His retirement income wat begin the day he retires, 10 years from today, and he will then recelve 24 additional annual payments. Inflation is expected to be 6% per year from today forward. He currently has $75,000 saved and expects to earn a retum on his savings of 8% per year with annual compounding. The data has been collected in the Microsoft Excet Online file below. Open the spreadsheet and perform the required analysis to answer the question below. How much must he save during each of the next 10 years (with equal deposits being made at the end of each year, beginning a year from today) to meet his retirement goal? (Note: Neither the amount he saves nor the amount he withdraws upon retirement is a growing annuity.) Do not round intermediate calculations. Round your answer to the nearest dollar. Required Annulty Payments Father's current age Number of yeas until retirement Number of years living in retirement Ist retirement payment, same purchasing power today as infiation rate Current savings at t=0 Percentoge retum earned Step 1. Calculate retiremant payments, beginning at t=10 Fixed retirement payments Step 2. Calculate the value of current savings at t=10 Value of current savings, 10 years from today Step 3. Calculate the value of the annuity due of redirmment payments at t=10 Value of annuity due 50 10 25 $45,000 6.00% $75,000 8,00% Step 4, Calculate the net amount that must be accumulated at t in 10 to recelvo desired rotirement payments Net amount needed in 10 years Formulas inN/A Step 5. Calculate the value of annual deposit needed to meet 24 desined rotirement goal 25. Value of annual deposit to meet retirement goal 26 27 Value of annual deposit to meet retirement goal

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