1. How much must an investor have saved in order to withdraw $5,000 per month if they expect their savings to last 25 years, and they can earn an average 7.5%?
2. How much must an investor set aside each month in order to achieve their goal of having $1,250,000 when she is 66 years old, 25 years from now? She believes she can earn an average annual return of 11.8% per year. What if she earns 9.8%? What if her return averages 12.8%?
3. Suppose that you have estimated that, to provide for your retirement income, you will need $2,250,000 on deposit in your retirement account when you retire. You believe that you will earn an average of 11% on your retirement investments until you retire in 35 years. What must your monthly deposits be to accumulate this total?
4. Lucius starts saving $100 per month at age 25 and averages 6% per year compounded monthly. Hector starts saving $1,215.22 per month at age 55 and averages 6% per year compounded monthly. Who will be better off at age 65 assuming neither had in money in their account when they started?
5. The objective is to save $1 million by retirement at age 65, based on an average interest rate of 6%. How much must a 25-year old would need to save per year to attain the objective? How much must a 40-year old save per year to achieve the same objective?