Jamie Lee and Ross, now 57 and still very active, have plenty of time on their hands now that the triplets are away at college. They both realized that time has just flown by, over twenty-four years have passed since they married Looking back over the past years, they realized that they have worked hard in their careers, Jamie Lee as the proprietor of a cupcake caf and Ross, self-employed as a web-page designer. They have enjoyed raising their family and strived to be financially sound as they are looking to retirement that is just around the corner. They saved regularly and invested wisely over the years. They rebounded nicely from the economic crisis over the past few years, as they watched their investments closely and adjusted their strategies when they felt it necessary. They purchase vehicles with cash and do not carry credit card balances, choosing instead to use them for convenience only. The triplets are pursuing their master's degrees and have tuition covered through work/study programs at the university Jamie Lee and Ross are just a few short years from realizing their goals of retiring at 65 and purchasing a home at the beach! They are reviewing their financial situation to ensure they will be ready for retirement. They anticipate being able to live comfortably with 80% of their current expenses. The rate of return on their investments until they retire is 4%. They expect this percentage to drop to 3% after retirement. Use this information, along with Exhibit 1:A. Exhibit 1-B, and the information provided below to determine the annual deposit amount Jamie Lee and Ross will need to make until they retire in order to make up the shortfall between their estimated expenses and income needed during retirement. Each answer must have a value for the assignment to be complete. Enter "O" for any unused categories. Current Expense Amounts. (Jamie Lee and Ross Combined) Fixed expenses: $4,700/month Variable expenses: $2,600/month Estimated Income Amounts.(Jamie Lee and Ross Combined) Social Security: $2,750/month Current IRA balance: $85,000 Estimated IRA withdrawal $350/month Other investments: $34,900/year Estimated Annual Retirement Living Expenses Estimated annual living expenses if retiring today Number of years until retirement Expected annual rate of return before retirement Future value (use Exhibit 1-A) Projected annual retirement living expenses, adjusted for inflation (Round your final answer to nearest whole number.) X (A) $ 0 Estimated Annual Income at Retirement Social Security income Company pension, personal retirement account income Investment and other income Total retirement income (Round your final answer to nearest whole number.) (B) $ 0 c) (C) Needed Investment fund after retirement (A-B) (Round your final answer to nearest whole number.) Number of years until retirement Expected annual rate of return before retirement Future value for a series of deposits (use Exhibit 1-B) Annual deposit to achieve needed investment fund (C/D) (Round your final answer to two decimal places.) () (D) EXHIBIT 1-A Future value (compounded sum) of 51 after a given numerot periods Period 2% 5% 6% 7% 3% 10% 11 99 1000 1080 1166 1020 100 1061 2013 1.101 1040 1082 3.125 21170 1.217 5 6 7 8 1205 1010 1000 1030 104 1051 1.067 1072 103 1094 1.105 1.118 1127 1130 1140 1161 1173 1154 1196 1.200 1220 3% 1050 1061 1093 1076 1.159 1.194 1230 1.267 1.305 134 1384 1426 1460 1513 1550 1.005 10 1149 1172 1195 1.210 1245 1260 1.294 1310 1346 1.373 1.400 10 1316 1.500 1423 1.430 1539 1601 1865 1732 11 12 1050 1103 1.15 1216 1276 130 1407 1477 1551 1630 1.710 1.796 1886 1980 2070 2.183 2.292 2.407 2527 2055 3386 1060 1.124 1.101 1262 1:338 1419 1504 1594 1689 1.791 7890 2012 2,133 2.361 2.507 2540 2005 2.854 3026 3207 4292 1070 1145 1.225 1.311 1105 1.501 1606 1718 1.836 1.967 2105 2252 2410 2570 2759 2.952 5.159 3.380 3.617 3,870 5427 7612 14974 29457 1.295 1417 1.530 1677 1828 1.095 2172 2.367 2.580 2813 3066 3342 1360 1360 1.450 1587 1714 1851 1990 2.159 2333 2.518 2720 2937 3172 3626 3.700 3996 2316 4661 6340 10.06 21725 46202 1.100 1110 210 1.23 1331 136 14 1.31 1611 165 772 11870 1049 2.076 2144 2.505 2350 2555 2.594 2859 2853 3.152 3155 144 14:52 5.797 3310 2177 785 4505 5311 5054 SA 5560 4544 6.116 7265 6727 06 10335 TS 174 2292 35250 65.000 117300 184570 1801 1873 1946 1486 1841 88808 1.703 1.754 106 2004 2.427 3.262 2026 2107 2.101 2.666 3243 122 3.970 2328 217 514 5.604 3425 15.30 31.400 74356 2322 1.548 1489 14 2801 2.200 2692 5745 10286 7010 11.467 7.107 18420 Period 12% 17 195 1 2 3 4 5 1.120 1.354 1405 1574 1785 1.974 2211 2.476 2.773 3.106 1311 13% 1.130 1.277 143 LASO 1342 2012 2.353 2458 3004 3.305 SAS 4335 4898 5535 4254 14% 2140 1300 1432 1600 1925 2.195 2.502 2853 5.09 10 11 13 13 5117 3.898 15% 16% 10% 20% 25% 30% 1150 1160 1170 1.100 1.100 1200 12:50 1.300 1325 1346 1.360 1.392 1416 AD 153 1500 1521 1561 1.602 1643 16 1720 1.955 2.197 1740 1874 1939 2005 2074 2.0 235 2011 2.100 2.102 2.280 2386 245 3052 1713 2313 2456 2565 2.700 2.50 29 3815 2010 2826 3001 3.185 3370 SSRS 3050 3278 3511 3759 4023 4500 5060 115 3518 3.805 4100 75 5100 753 1004 404 4411 4807 5234 5.696 4192 9313 STAS 2652 5624 4178 6.777 7430 To 17.922 5.350 5.950 6580 7.250 3064 5016 2500 4153 7699 Svo 1000 110 302 7076 79 9002 10142 11430 12830 32374 8.157 9.266 10530 11.914 13.500 154 2003 91.186 10746 12.50 14129 16172 35127 450 10.761 12 468 14426 1667 2218 MO 12375 1879 10873 22.091 ATS 3311 31240 14252 16777 10740 25214 27252 31 90 100 16367 0401 23.106 27393 52430 30 10 OSO 32.10 OST 50.650 2008 7280 9539 24700 105 66212 AO 111070 10 100 23:30 000 2620000 267560 7830 533 570 750.3001051700 1200 DOO 168.1.100 1670700120022003. CO 100.000 70.00.000000 25 3707 4226 4.816 5.492 361 7.130 3.137 9276 1057 12054 1374 4587 1.474 130 66 700 8615 15 TA 17 10 30 70 9.034 10.197 11523 21.231 30.115 132.750 25 17 000 2000 9305 20.000 10 SO 950 151 700330 EXHIBIT 1-B Future value (compounded sum) of $1 paid in at the end of each period for a given number of time periods (an annuity) Period 2% 4% 5% 7% 1000 1 2 2070 4 5 6 2 6% 1.000 2060 3154 4375 5637 6075 8.394 9197 11.491 3.215 1440 5.751 573 7716 7355 8654 1000 2010 3.122 4246 5.416 6633 7898 9214 10585 12006 13486 15026 16.627 18.292 13.181 15 1000 2010 3.030 4060 5101 6152 7214 6206 2.300 10.462 11567 12685 13.000 14947 16.097 17.250 18.450 19615 20011 22010 20.245 34785 48686 463 10 11 12 13 14 15 16 12 18 10 1000 2020 3060 4122 5204 6.305 7454 8.583 9.755 10.950 12.160 13.412 14.680 15.974 17.293 18639 20012 21412 22.341 24.297 32050 10558 60.402 04:579 3W 1.000 2030 3.091 4184 5.309 6468 7.662 8092 10.159 11.464 12800 14.192 15.618 17.00 18.500 20.157 21762 23.414 25.117 26.370 36450 47575 75.401 112.000 1.000 2.050 3.153 4310 5.526 6 802 8.142 9549 11027 12.578 14.207 15917 17.713 19.99 21579 23.657 25.340 28.132 50539 55066 47727 66.459 120.000 209.350 20014 8% 9% 10% 11% 1000 1.000 1000 1.000 2010 2090 2.100 2110 3246 3.270 3.310 3.342 2.506 2641 4710 5867 5.985 6105 6228 7:336 7523 7015 8923 9,200 9.487 9.783 10437 11028 11.436 11859 12488 13021 13570 14164 14487 15.193 15.937 16722 16.645 17560 18531 19.561 18977 20.141 21.384 22713 21.495 22.955 24523 26.212 240215 26.019 27975 30.095 27.152 29.361 31.772 SLAOS 30.374 33.003 35.950 30.190 33.750 36.974 40545 44501 37450 41301 45599 50.396 41.446 46.018 51.150 56.950 45.762 51.160 57 275 641203 73106 34701 98 347 114410 113280 136310 164.490 199020 250.000 337890 142.590 581.830 573.770 615.000 1.163.001668.000 14072 16870 18.882 21015 23276 25673 28.213 30.000 33.760 56.786 54.865 70055 154760 290.340 10260 11.970 13.816 15.784 17 888 20141 22.550 25.129 27888 30.340 33.999 37370 40.995 63200 96461 199.640 406.530 21.825 23698 25645 27671 29.778 41640 56 DAS 95026 152670 25 888888 40 Period 1 2 3 4 5 6 7 8 4995 7014 12% 14% 15% 16% 17 10 19% 20% 25% 30 1000 1.000 1.000 1000 1.000 1000 1000 1000 1000 1000 2.120 2.130 2.140 2150 2.100 2.170 2.100 2.190 2.300 2250 2.300 3374 3407 3.440 3.473 3.506 3530 3.572 3006 3.840 3.813 3990 4779 4550 4921 50 5.141 5215 -5.291 5.30 5.766 6.187 6353 6.480 6610 4740 6877 7.154 7.297 74 207 9.045 8115 6373 8.754 8.977 9207 0.443 9083 09.30 11.359 12.750 10089 10.405 10.750 11067 11414 11772 12.142 12.523 12016 15.07 17583 12.300 12757 15233 15.721 1420 14.773 15.377 15002 16.490 10340 235 14776 15.416 16.085 16784 17.519 18285 19086 19.923 20799 25.102 2015 17549 16420 19337 20304 21321 22.393 23521 24701 25.059 35250 2614 20.055 21814 23045 2434 25733 27.200 20755 30.404 12.150 $105 24.153 25.650 27.271 20.00 30 350 32824 34931 37180 39.381 54.300 74322 20.029 20905 32089 36.71 39.104 42219 45244 1897 48760 9713 32.393 34885 37561 4050 45.672 47.103 SOLO 54441 14.04 127010 37.380 10.417 13543 75 51660 10 6005 6661 72035 TO 6 187200 42.755 4673 5090 55717 $0.925 72.99 7950 2.44 T110 211470 84 53739 9.11 65075 71 673 74979 87.000 90022 105.030 173440 205010 55750 6125 34 75836 04.141 9340 10570 115170 120.20 218.050 51.50 63.440 70749 78964 M212 9103 123-410 158170 1546740 27.500 10 72.053 07 91025 10341 115 300 130030 144430 165.00 1860 42,950 40170 133330 15520 181.870 212.70 249.210 292.110 S42.400 402040 710010500 21.30 201356 293200 356700 2300 530 510 40 70.950 0 19001777.300 1.750.000 767000013700 30000 1100 2560 1200 16371051529300 734100 10.000000 120.593.000 1400000 5459500 400 1700 10.436.000 15.000.000 113.000 15000 25000 10000000 10 11 12 13 14 15 16 17 in 19 30 25 30 59.100 110290 10 Jamie Lee and Ross, now 57 and still very active, have plenty of time on their hands now that the triplets are away at college. They both realized that time has just flown by, over twenty-four years have passed since they married Looking back over the past years, they realized that they have worked hard in their careers, Jamie Lee as the proprietor of a cupcake caf and Ross, self-employed as a web-page designer. They have enjoyed raising their family and strived to be financially sound as they are looking to retirement that is just around the corner. They saved regularly and invested wisely over the years. They rebounded nicely from the economic crisis over the past few years, as they watched their investments closely and adjusted their strategies when they felt it necessary. They purchase vehicles with cash and do not carry credit card balances, choosing instead to use them for convenience only. The triplets are pursuing their master's degrees and have tuition covered through work/study programs at the university Jamie Lee and Ross are just a few short years from realizing their goals of retiring at 65 and purchasing a home at the beach! They are reviewing their financial situation to ensure they will be ready for retirement. They anticipate being able to live comfortably with 80% of their current expenses. The rate of return on their investments until they retire is 4%. They expect this percentage to drop to 3% after retirement. Use this information, along with Exhibit 1:A. Exhibit 1-B, and the information provided below to determine the annual deposit amount Jamie Lee and Ross will need to make until they retire in order to make up the shortfall between their estimated expenses and income needed during retirement. Each answer must have a value for the assignment to be complete. Enter "O" for any unused categories. Current Expense Amounts. (Jamie Lee and Ross Combined) Fixed expenses: $4,700/month Variable expenses: $2,600/month Estimated Income Amounts.(Jamie Lee and Ross Combined) Social Security: $2,750/month Current IRA balance: $85,000 Estimated IRA withdrawal $350/month Other investments: $34,900/year Estimated Annual Retirement Living Expenses Estimated annual living expenses if retiring today Number of years until retirement Expected annual rate of return before retirement Future value (use Exhibit 1-A) Projected annual retirement living expenses, adjusted for inflation (Round your final answer to nearest whole number.) X (A) $ 0 Estimated Annual Income at Retirement Social Security income Company pension, personal retirement account income Investment and other income Total retirement income (Round your final answer to nearest whole number.) (B) $ 0 c) (C) Needed Investment fund after retirement (A-B) (Round your final answer to nearest whole number.) Number of years until retirement Expected annual rate of return before retirement Future value for a series of deposits (use Exhibit 1-B) Annual deposit to achieve needed investment fund (C/D) (Round your final answer to two decimal places.) () (D) EXHIBIT 1-A Future value (compounded sum) of 51 after a given numerot periods Period 2% 5% 6% 7% 3% 10% 11 99 1000 1080 1166 1020 100 1061 2013 1.101 1040 1082 3.125 21170 1.217 5 6 7 8 1205 1010 1000 1030 104 1051 1.067 1072 103 1094 1.105 1.118 1127 1130 1140 1161 1173 1154 1196 1.200 1220 3% 1050 1061 1093 1076 1.159 1.194 1230 1.267 1.305 134 1384 1426 1460 1513 1550 1.005 10 1149 1172 1195 1.210 1245 1260 1.294 1310 1346 1.373 1.400 10 1316 1.500 1423 1.430 1539 1601 1865 1732 11 12 1050 1103 1.15 1216 1276 130 1407 1477 1551 1630 1.710 1.796 1886 1980 2070 2.183 2.292 2.407 2527 2055 3386 1060 1.124 1.101 1262 1:338 1419 1504 1594 1689 1.791 7890 2012 2,133 2.361 2.507 2540 2005 2.854 3026 3207 4292 1070 1145 1.225 1.311 1105 1.501 1606 1718 1.836 1.967 2105 2252 2410 2570 2759 2.952 5.159 3.380 3.617 3,870 5427 7612 14974 29457 1.295 1417 1.530 1677 1828 1.095 2172 2.367 2.580 2813 3066 3342 1360 1360 1.450 1587 1714 1851 1990 2.159 2333 2.518 2720 2937 3172 3626 3.700 3996 2316 4661 6340 10.06 21725 46202 1.100 1110 210 1.23 1331 136 14 1.31 1611 165 772 11870 1049 2.076 2144 2.505 2350 2555 2.594 2859 2853 3.152 3155 144 14:52 5.797 3310 2177 785 4505 5311 5054 SA 5560 4544 6.116 7265 6727 06 10335 TS 174 2292 35250 65.000 117300 184570 1801 1873 1946 1486 1841 88808 1.703 1.754 106 2004 2.427 3.262 2026 2107 2.101 2.666 3243 122 3.970 2328 217 514 5.604 3425 15.30 31.400 74356 2322 1.548 1489 14 2801 2.200 2692 5745 10286 7010 11.467 7.107 18420 Period 12% 17 195 1 2 3 4 5 1.120 1.354 1405 1574 1785 1.974 2211 2.476 2.773 3.106 1311 13% 1.130 1.277 143 LASO 1342 2012 2.353 2458 3004 3.305 SAS 4335 4898 5535 4254 14% 2140 1300 1432 1600 1925 2.195 2.502 2853 5.09 10 11 13 13 5117 3.898 15% 16% 10% 20% 25% 30% 1150 1160 1170 1.100 1.100 1200 12:50 1.300 1325 1346 1.360 1.392 1416 AD 153 1500 1521 1561 1.602 1643 16 1720 1.955 2.197 1740 1874 1939 2005 2074 2.0 235 2011 2.100 2.102 2.280 2386 245 3052 1713 2313 2456 2565 2.700 2.50 29 3815 2010 2826 3001 3.185 3370 SSRS 3050 3278 3511 3759 4023 4500 5060 115 3518 3.805 4100 75 5100 753 1004 404 4411 4807 5234 5.696 4192 9313 STAS 2652 5624 4178 6.777 7430 To 17.922 5.350 5.950 6580 7.250 3064 5016 2500 4153 7699 Svo 1000 110 302 7076 79 9002 10142 11430 12830 32374 8.157 9.266 10530 11.914 13.500 154 2003 91.186 10746 12.50 14129 16172 35127 450 10.761 12 468 14426 1667 2218 MO 12375 1879 10873 22.091 ATS 3311 31240 14252 16777 10740 25214 27252 31 90 100 16367 0401 23.106 27393 52430 30 10 OSO 32.10 OST 50.650 2008 7280 9539 24700 105 66212 AO 111070 10 100 23:30 000 2620000 267560 7830 533 570 750.3001051700 1200 DOO 168.1.100 1670700120022003. CO 100.000 70.00.000000 25 3707 4226 4.816 5.492 361 7.130 3.137 9276 1057 12054 1374 4587 1.474 130 66 700 8615 15 TA 17 10 30 70 9.034 10.197 11523 21.231 30.115 132.750 25 17 000 2000 9305 20.000 10 SO 950 151 700330 EXHIBIT 1-B Future value (compounded sum) of $1 paid in at the end of each period for a given number of time periods (an annuity) Period 2% 4% 5% 7% 1000 1 2 2070 4 5 6 2 6% 1.000 2060 3154 4375 5637 6075 8.394 9197 11.491 3.215 1440 5.751 573 7716 7355 8654 1000 2010 3.122 4246 5.416 6633 7898 9214 10585 12006 13486 15026 16.627 18.292 13.181 15 1000 2010 3.030 4060 5101 6152 7214 6206 2.300 10.462 11567 12685 13.000 14947 16.097 17.250 18.450 19615 20011 22010 20.245 34785 48686 463 10 11 12 13 14 15 16 12 18 10 1000 2020 3060 4122 5204 6.305 7454 8.583 9.755 10.950 12.160 13.412 14.680 15.974 17.293 18639 20012 21412 22.341 24.297 32050 10558 60.402 04:579 3W 1.000 2030 3.091 4184 5.309 6468 7.662 8092 10.159 11.464 12800 14.192 15.618 17.00 18.500 20.157 21762 23.414 25.117 26.370 36450 47575 75.401 112.000 1.000 2.050 3.153 4310 5.526 6 802 8.142 9549 11027 12.578 14.207 15917 17.713 19.99 21579 23.657 25.340 28.132 50539 55066 47727 66.459 120.000 209.350 20014 8% 9% 10% 11% 1000 1.000 1000 1.000 2010 2090 2.100 2110 3246 3.270 3.310 3.342 2.506 2641 4710 5867 5.985 6105 6228 7:336 7523 7015 8923 9,200 9.487 9.783 10437 11028 11.436 11859 12488 13021 13570 14164 14487 15.193 15.937 16722 16.645 17560 18531 19.561 18977 20.141 21.384 22713 21.495 22.955 24523 26.212 240215 26.019 27975 30.095 27.152 29.361 31.772 SLAOS 30.374 33.003 35.950 30.190 33.750 36.974 40545 44501 37450 41301 45599 50.396 41.446 46.018 51.150 56.950 45.762 51.160 57 275 641203 73106 34701 98 347 114410 113280 136310 164.490 199020 250.000 337890 142.590 581.830 573.770 615.000 1.163.001668.000 14072 16870 18.882 21015 23276 25673 28.213 30.000 33.760 56.786 54.865 70055 154760 290.340 10260 11.970 13.816 15.784 17 888 20141 22.550 25.129 27888 30.340 33.999 37370 40.995 63200 96461 199.640 406.530 21.825 23698 25645 27671 29.778 41640 56 DAS 95026 152670 25 888888 40 Period 1 2 3 4 5 6 7 8 4995 7014 12% 14% 15% 16% 17 10 19% 20% 25% 30 1000 1.000 1.000 1000 1.000 1000 1000 1000 1000 1000 2.120 2.130 2.140 2150 2.100 2.170 2.100 2.190 2.300 2250 2.300 3374 3407 3.440 3.473 3.506 3530 3.572 3006 3.840 3.813 3990 4779 4550 4921 50 5.141 5215 -5.291 5.30 5.766 6.187 6353 6.480 6610 4740 6877 7.154 7.297 74 207 9.045 8115 6373 8.754 8.977 9207 0.443 9083 09.30 11.359 12.750 10089 10.405 10.750 11067 11414 11772 12.142 12.523 12016 15.07 17583 12.300 12757 15233 15.721 1420 14.773 15.377 15002 16.490 10340 235 14776 15.416 16.085 16784 17.519 18285 19086 19.923 20799 25.102 2015 17549 16420 19337 20304 21321 22.393 23521 24701 25.059 35250 2614 20.055 21814 23045 2434 25733 27.200 20755 30.404 12.150 $105 24.153 25.650 27.271 20.00 30 350 32824 34931 37180 39.381 54.300 74322 20.029 20905 32089 36.71 39.104 42219 45244 1897 48760 9713 32.393 34885 37561 4050 45.672 47.103 SOLO 54441 14.04 127010 37.380 10.417 13543 75 51660 10 6005 6661 72035 TO 6 187200 42.755 4673 5090 55717 $0.925 72.99 7950 2.44 T110 211470 84 53739 9.11 65075 71 673 74979 87.000 90022 105.030 173440 205010 55750 6125 34 75836 04.141 9340 10570 115170 120.20 218.050 51.50 63.440 70749 78964 M212 9103 123-410 158170 1546740 27.500 10 72.053 07 91025 10341 115 300 130030 144430 165.00 1860 42,950 40170 133330 15520 181.870 212.70 249.210 292.110 S42.400 402040 710010500 21.30 201356 293200 356700 2300 530 510 40 70.950 0 19001777.300 1.750.000 767000013700 30000 1100 2560 1200 16371051529300 734100 10.000000 120.593.000 1400000 5459500 400 1700 10.436.000 15.000.000 113.000 15000 25000 10000000 10 11 12 13 14 15 16 17 in 19 30 25 30 59.100 110290 10
