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Problem: Steve is 30 years old and is currently employed as a Marketing Manager at a well-known corporation. He has progressed well in his career, with the ultimate goal of becoming the company's CEO. Steve's current salary of $78,000 has increased at an average rate of 5% per year, with routine merit raises, and he expects it keep increasing. Steve's firm, ABC Corporation, has a defined contribution plan (401k) plan in place. Employees are allowed to contribute up to 15% of their gross annual salary. Now that Steve has wedding plans on the horizon, Steve has come to the that it's time to start saving - while he's still relatively young! Steve expects that the lovebirds two largest future expenses will be the cost of a wedding (short-term), then later the down payment on a house (intermediate term). The couple plans to spend $10,000 of their own money on the wedding in twelve months. They also hope to purchase a $400,000 house within 5 years. Steve's fiance, Jane, states her parents have promised to match their 10% down payment, but only if they manage to save it within 5 years. Finally. Steve would like to retire at age 60. Both future spouses agree that Steve will automate his savings by setting up monthly contributions to his wedding, house and 401k accounts. 1. How much money would Steve have to save every year to achieve an age 60 balance of one million dollars? What percentage of his current salary is that annual savings amount? Problem: Steve is 30 years old and is currently employed as a Marketing Manager at a well-known corporation. He has progressed well in his career, with the ultimate goal of becoming the company's CEO. Steve's current salary of $78,000 has increased at an average rate of 5% per year, with routine merit raises, and he expects it keep increasing. Steve's firm, ABC Corporation, has a defined contribution plan (401k) plan in place. Employees are allowed to contribute up to 15% of their gross annual salary. Now that Steve has wedding plans on the horizon, Steve has come to the that it's time to start saving - while he's still relatively young! Steve expects that the lovebirds two largest future expenses will be the cost of a wedding (short-term), then later the down payment on a house (intermediate term). The couple plans to spend $10,000 of their own money on the wedding in twelve months. They also hope to purchase a $400,000 house within 5 years. Steve's fiance, Jane, states her parents have promised to match their 10% down payment, but only if they manage to save it within 5 years. Finally. Steve would like to retire at age 60. Both future spouses agree that Steve will automate his savings by setting up monthly contributions to his wedding, house and 401k accounts. 1. How much money would Steve have to save every year to achieve an age 60 balance of one million dollars? What percentage of his current salary is that annual savings amount