Name: Lab 8.5-8.8 Show your work in order to receive credit. You may use a calculator or Excel/Google Sheets as needed. 1 Suppose you can afford to invest $4, 800 per year into a traditional (tax-deferred) IRA annuity. This annuity offers 7% annual interest compounded monthly. You begin saving at 30 and begin to make withdrawals at age 65. (a) What are the values of P, r, n, and t? (b) What is the future value of the annuity (round to the nearest cent)? (c) Once you turn 65, you begin making monthly withdrawals of $2,500. How many withdrawals can you make (round your answer down to the nearest whole number)? How many years will this retirement income last? (d) How old will you be when this retirement income runs out? Does this seem sufficiently far into your life? (e) Remember that this is a tax-deferred savings plan. About 13.5% of your income must be paid to cover income tax. How much do you actually get to keep each month? (f) Accounting for the 13.5% lost to income tax each withdrawal, how much money do you actually get to keep from the annuity? (g) Instead of investing in a traditional (tax-deferred) IRA, you could invest in a Roth IRA where you pay income taxes now but avoid taxes later. Suppose that you find a Roth IRA with the same annual interest and com- pounding period as the IRA described above. If you want the Roth IRA to be worth at least as much as IRA above post taxes, how much do you need to deposit each month? Round your answer up to the nearest cent. [Hint: The future value (A) is the value from part (f).]