Peter and Blair recently reviewed their future retirement income and expense projections. They hope to retire in

33 years and anticipate they will need funding for an additional

24 years. They determined that they would have a retirement income of

$61,000 in today's dollars, but they would actually need

$86,551 in retirement income to meet all of their objectives. Calculate the total amount that Peter and Blair must save if they wish to completely fund their income shortfall, assuming a

2 percent inflation rate and a return of

7 percent.

Part 1

The total amount that Peter and Blair must save if they wish to completely fund their income shortfall, assuming a

2 percent inflation rate and a return of 7 percent is $??????????? (Round to the nearest cent.)

\begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{5}{|c|}{ Compound Sum of \$1 (FVIF) } \\ \hline n & 2.00% & 3.00% & 4.00% & 5.00% \\ \hline 24 & 1.6084 & 2.0328 & 2.5633 & 3.2251 \\ \hline 25 & 1.6406 & 2.0938 & 2.6658 & 3.3864 \\ \hline 26 & 1.6734 & 2.1566 & 2.7725 & 3.5557 \\ \hline 27 & 1.7069 & 2.2213 & 2.8834 & 3.7335 \\ \hline 28 & 1.7410 & 2.2879 & 2.9987 & 3.9201 \\ \hline 29 & 1.7758 & 2.3566 & 3.1187 & 4.1161 \\ \hline 30 & 1.8114 & 2.4273 & 3.2434 & 4.3219 \\ \hline 31 & 1.8476 & 2.5001 & 3.3731 & 4.5380 \\ \hline 32 & 1.8845 & 2.5751 & 3.5081 & 4.7649 \\ \hline 33 & 1.9222 & 2.6523 & 3.6484 & 5.0032 \\ \hline 34 & 1.9607 & 2.7319 & 3.7943 & 5.2533 \\ \hline 35 & 1.9999 & 2.8139 & 3.9461 & 5.5160 \\ \hline \end{tabular} \begin{tabular}{|l|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{10}{|c|}{ Present Value of an Annuity (PVIFA) } \\ \hline n & 2.00% & 3.00% & 4.00% & 5.00% & 6.00% & 7.00% & 8.00% & 9.00% & 10.00% \\ \hline 13 & 11.3484 & 10.6350 & 9.9856 & 9.3936 & 8.8527 & 8.3577 & 7.9038 & 7.4869 & 7.1034 \\ \hline 14 & 12.1062 & 11.2961 & 10.5631 & 9.8986 & 9.2950 & 8.7455 & 8.2442 & 7.7862 & 7.3667 \\ \hline 15 & 12.8493 & 11.9379 & 11.1184 & 10.3797 & 9.7122 & 9.1079 & 8.5595 & 8.0607 & 7.6061 \\ \hline 16 & 13.5777 & 12.5611 & 11.6523 & 10.8378 & 10.1059 & 9.4466 & 8.8514 & 8.3126 & 7.8237 \\ \hline 17 & 14.2919 & 13.1661 & 12.1657 & 11.2741 & 10.4773 & 9.7632 & 9.1216 & 8.5436 & 8.0216 \\ \hline 18 & 14.9920 & 13.7535 & 12.6593 & 11.6896 & 10.8276 & 10.0591 & 9.3719 & 8.7556 & 8.2014 \\ \hline 19 & 15.6785 & 14.3238 & 13.1339 & 12.0853 & 11.1581 & 10.3356 & 9.6036 & 8.9501 & 8.3649 \\ \hline 20 & 16.3514 & 14.8775 & 13.5903 & 12.4622 & 11.4699 & 10.5940 & 9.8181 & 9.1285 & 8.5136 \\ \hline 21 & 17.0112 & 15.4150 & 14.0292 & 12.8212 & 11.7641 & 10.8355 & 10.0168 & 9.2922 & 8.6487 \\ \hline 22 & 17.6580 & 15.9369 & 14.4511 & 13.1630 & 12.0416 & 11.0612 & 10.2007 & 9.4424 & 8.7715 \\ \hline 23 & 18.2922 & 16.4436 & 14.8568 & 13.4886 & 12.3034 & 11.2722 & 10.3711 & 9.5802 & 8.8832 \\ \hline 24 & 18.9139 & 16.9355 & 15.2470 & 13.7986 & 12.5504 & 11.4693 & 10.5288 & 9.7066 & 8.9847 \\ \hline 25 & 19.5235 & 17.4131 & 15.6221 & 14.0939 & 12.7834 & 11.6536 & 10.6748 & 9.8226 & 9.0770 \\ \hline 26 & 20.1210 & 17.8768 & 15.9828 & 14.3752 & 13.0032 & 11.8258 & 10.8100 & 9.9290 & 9.1609 \\ \hline 27 & 20.7069 & 18.3270 & 16.3296 & 14.6430 & 13.2105 & 11.9867 & 10.9352 & 10.0266 & 9.2372 \\ \hline \end{tabular}