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PLEASE ANSWER ALL THE FOLLOWING QUESTION WITH RIGHT FORMULA You are trying to decide how much to save for retirement. Assume you plan to save
PLEASE ANSWER ALL THE FOLLOWING QUESTION WITH RIGHT FORMULA
You are trying to decide how much to save for retirement. Assume you plan to save $4,500 per year with the Est investment made one year from now You think you can earn 7.5% per year on your investments and you pian to retire in 28 years, immediately after making your last $4.500 investment a. How much will you have in your retirement account on the day you retire? b. 1f instead of investing $4,500 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? t. If you hope to live for 30 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 30th withdrawal (assume your savings will continue to earn 7.5% in retirement)? d. 1f instead, you decide to withdraw $79,000 per year in retirement (again with the Est withdrawal one year after retiring), how many years will it take until you exhaust your savings? (Use trial-and-error, a financial calculator: solve for N, or Excel: function NPER) e. Assuming the most you can afford to save is $900 per year, but you want to retire with $1,000,000 in your investment account, how high of a return do you need to earn on your investments? (Use trial-and-error, a financial calculator: solve for the interest rate, or Excel: function RATE)Step by Step Solution
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