Part I: Bob & Sue retirement (2.5%: 2% for calculations & timelines, 0.5% for organization and explanations) Facts: Bob age 40/Sue age 40 (2020)Plan to Retire Bob Age 65 Assume a discount rate of 6% (all pensions & oas)/ 7% return on investments Assume both receive Max CPP of $11,500 and OAS $6400 in 2020 $Cdn at age 65 Desired Income age 65 to 95 is $67,000 (or $33,500 each) in 2020 $CDN Ignore inflation & taxes. Tasks: 1. How much do they need (Lumpsum) at age 65 to fund the retirement goal? 2. How much will the government pensions provide? Is there a surplus or shortfall. 3. If a shortfall, how much needs to be saved monthly? 4. If, Bob was to receive a $28,080 company pension at age 65 (2020 $Cdn), how would this change? Redo 2. & 3. HINTS: i) Use FV to get 2020 numbers to 2045; ii) Use PVs to compare lumpsums from cash flows Required: Show all calculations with appropriate timeline displaying how you have organized all your variables. State the formula that applies. Solve using formulas and calculator (show the key strokes)

Part II: Case chapter 12 (page 453). Should you borrow to make an RRSP Contribution? Show all calculations including the formulas used and calculator keystrokes. Show timelines with variables of interest. Re: Solve using formula and using calculator.(2.5% - 2% for calculations & timelines, 0.5% for organization and explanations). Answer all questions from case.