George, age 43, earns $80,000 annually; and his wage replacement ratio has been determined to be 80%. He expects inflation will average 3% for his entire life expectancy. He expects to work until 68 and live until 90. He anticipates an 8% return on his investments. Additionally, Social Security Administration has notified him that his annual retirement benefit, in today's dollars will be $26,000.

1. Using the capital needs / annuity method, calculate how much capital George will need to be able to retire at age 68.

a. $836,000. b. $1,760,000.00. c. $1,061,342.08. d. $1,112,863.56. e. $1,214,178.12

2. Using the capital preservation model, calculate how much capital George needs, in order to retire at 68.

a. $954,974.95. b. $1,061,342.08. c. $1,217,311.57. d. $1,317,564.25. e. $1,412,965.23

3. Using the purchasing power preservation model, calculate how much capital George needs, in order to retire at 68.

a. $1,061,342.08. b. $1,216,317.03. c. $1,317,564.25. d. $1,505,091.25. e. $1,708,909.46