Pertains to the Question Number 9 and the information below, did they answer all the questions pertaining to their problem?

can you expand on the information given

Number 9

Suppose you are 25 years old and would like to retire at age 65 with an accumulated retirement fund from which you could draw an income of $200,000 per year forever! Complete the following: How much would you need to deposit each month to accomplish this goal? Assume a constant APR of 6%.Locate an advertisement for an investment plan and describe some of the cited benefits of the plan.

Apply what you learned in Section 4C (Savings Plans and Investments) in your course textbook to identify at least one possible drawback of the plan.

here is enough information given to go through a thorough plan to ensure that if you follow the map laid out by the hard numbers you will be able to meet this goal.The on caveat I would have to add is that $200,000 annually now might be pretty nice, but it cannot be your end game plan.We do not know what inflation will bring the cost of living to by the time we are 65 (40 years later.)We also don't know if we now own a home at the age of 65, or if we are making payments on a mortgage or paying rent for housing.As we go through our goals of savings, it is also important to be mindful of setting ourselves up by not just guaranteeing and income for retirement, but also doing what we can to limit our expenses in the retirement years.We should plan as though medical costs and even nursing home expenses will present themselves at some age, so don't get complacent on a goal to live on a lump sum of $200,000 per year based on your savings plan as addressed in this for instance.

All of that being said, I very much appreciate this for instance.I think making a savings goal of having a lump sum and plan to live off the interest is a solid foundational plan for retirement.Here we are being wiser than a lot of 25 year-olds (myself included)We have 40 years to get to a lump sum that will earn $200,000 annually anticipating 6% APR.That means we have to have enough in the bank to earn that amount each year.To calculate that amount we must figure $200,000 = .06 x (total balance).

Or $200,000 = $3,333,333.34

0.06

So, we can see to meet our goal we have 40 years to save just over 3.3 million dollars.Having 40 years to do so is a helpful advantage, because that way we can benefit from the gift of compound interest.This means we don't actually have to sock away over 3.3 million on our own, but if we continue to contribute to the savings account each month we can watch our money grow all the way to this total number so we will be good to go when we are 65.Believing that the 6% APR will remain solid, we can now calculate how much we need to put into this account each month to get us the right total.

To do this we will use this calculation:

A= $3,333,333.34

APR = 0.06

n = 12 (monthly deposits)

Y = 40 years

PMT (monthly payment) = A x APR/n

[(1 + APR/n)(nY) - 1]

Or

$200,000 x 0.06/12

[(1+ 0.06/12)(12x40)-1]

= $200,000 x 0.005

(1.005)480 - 1]

= $1,000

9.96

= $100.41

So, conservatively speaking, if we were to religiously save $101 into a savings account every month from now to 65 we should meet our goal for retirement.

• Locate an advertisement for an investment plan and describe some of the cited benefits of the

plan.

Looking at Schwab.com, they offer a couple different types of investment plans.I will review the basic "invest on your own" plan.This plan allows for the investor to steer their investments as they see fit.This is a complete hands-on tool for the investor that includes many recourses for the investor to use to be better educated and more informed as they drive their own financial future.

• Apply what you learned in Section 4C (Savings Plans and Investments) in your course textbook to

identify at least one possible drawback of the plan.

The drawback to any savings plan is the simple fact that we cannot know the future.A savings plan is just a plan, and as we all know, life is what happens while we are making plans.I can personally speak to the issue of trying to save while having a stay-at-home wife until our children were in full-time school, having a mortgage, and debt that charges interest at a greater rate than what I will earn in a savings or investment vehicle.It comes down to a personal philosophy, but we can also do the math on considering if it is wiser to put $100 per month into an investment account that will pay a %6 APR, or put that money towards a mortgage that is charging me. 3.75% APR.Definitely better to go with the investment vehicle in this case.However, credit cards, car loans, or other forms of debt tend to charge a higher rate than the %6 you may earn on an investment vehicle, so do we actually save money by not saving money?Again, it is a savings philosophy for each individual to decide upon, but as they have also said, we don't plan to fail, we fail to plan.So wherever we are in life and whatever our life goals are, thinking about the long-term is a must.It will be here sooner than we may be ready for.

Bennett, J. O., & Briggs, W. L. (2019).Using and understanding mathematics: A quantitative reasoning approach(7th ed.). Boston, MA: Pearson.

Schwab.com https://www.schwab.com/how-to-invest?src=SEM&ef_id=Cj0KCQjw_8mHBhClARIsABfFgpg1lO2cSjq0O72RW0uwgsoUkaOwZGzxxqI-inAucYmxGB8E_ebVjCwaAipSEALw_wcB:G:s&s_kwcid=AL!5158!3!434595462951!b!!g!!%2Binvestment%20%2Bplanning!10030012537!101387237432&keywordid=kwd-21912172871&gclid=Cj0KCQjw_8mHBhClARIsABfFgpg1lO2cSjq0O72RW0uwgsoUkaOwZGzxxqI-inAucYmxGB8E_ebVjCwaAipSEALw_wcB