Future value Prue Lab 3 Retirement Plan Suppose you are 20 years old, you decided to start saving for retirement. Aiming to retire at 55 years old. 1) You open a retirement account, and deposit $250 at the end of each month, earning an interest rate of 1% compounded monthly. What will be the total balance in your retirement account when you retire at 55? 2) After retirement, you plan to withdraw the same amount of money each month for 40 years, with an interest rate of 0.7% compounded monthly. What will be the monthly withdrawal amount from your retirement account? 3) How much of the retirement account did you contribute? 4) What is the total amount you expect to withdraw over 40 years after retirement? 5) What is the total interest in your entire life plan? 6) What can you do if you want more money to withdraw from your retirement account when you retire? 1) 55-20 = 35 years ht F = R(+) nt - 1 r/n .01 (12)(35) = 250 (1+12) -1 2) P = R1-(1+)-he "In 424,458.22= 007-12(40) 12) = 0.1/12 $424,458.22 .007/12 424,458 22= R(418.5506703 418.5506703 418.5506703 R = 1014.1143 R $1,014.11 Future Value present "value Lab 3 Retirement Plan Suppose you are 20 years old, you decided to start saving for retirement. Aiming to retire at 55 years old. 1) You open a retirement account, and deposit $250 at the end of each month, earning an interest rate of 1% compounded monthly. What will be the total balance in your retirement account when you retire at 55? 2) After retirement, you plan to withdraw the same amount of money each month for 40 years, with an interest rate of 0.7% compounded monthly. What will be the monthly withdrawal amount from your retirement account? 3) How much of the retirement account did you contribute? 4) What is the total amount you expect to withdraw over 40 years after retirement? 5) What is the total interest in your entire life plan? 6) What can you do if you want more money to withdraw from your retirement account when you retire?