Problem 18-6 Calculating an IRA Accumulation [LO18-5] 17 Janine is 35 and has a good job at a biotechnology company. Janine estimates that she will need $899,000 in her total retirement nest egg by the time she is 65 in order to have retirement income of $27,500 a year. (She expects that Social Security will pay her an additional $17,000 a year.) She currently has $4,000 in an IRA, an important part of her retirement nest egg. She believes her IRA will grow at an annual rate of 9 percent, and she plans to leave it untouched until she retires at age 65. How much will Janine's IRA be worth when she needs to start withdrawing money from it when she retires? Use Exhibit 1-A. (Round time value factor to 3 decimal places and answer to 2 decimal places.) Future value of IRA eBook P Print References 0.71 points Exhibit 1-A Future value (compounded sum) of $1 after a given number of time periods Perlod 2% 4% 5% 6% 1 1% 1.010 1.020 1.020 1.040 3% 1.030 1.061 1.040 1.082 1.050 1.103 2 3 1.030 1.061 1.093 1.125 1.158 4 1.041 1.082 1.126 1.170 1.216 5 1.051 1.104 1.159 1.217 1.276 6 1.062 1.126 1.194 1.265 1.340 7 1.072 1.119 1.230 1.316 1.407 8 1.083 1.172 1.267 1.369 1.477 9 1.094 1.195 1.305 1.423 1.551 10 1.105 1.219 1.344 1.180 1.629 11 1.116 1.243 1.384 1.539 1.710 12 1.127 1.268 1.426 1.601 1.796 13 1.138 1.294 1.169 1.665 1.886 14 1.149 1.319 1.513 1.732 1.980 15 1.161 1.346 1.558 1.801 2.079 16 1.173 1.373 1.605 1.873 2.183 17 1.184 1.400 1.653 1.948 2.292 18 1.196 1.428 1.702 2.026 2.407 19 1.208 1.157 1.751 2.107 2.527 20 1.220 1.486 1.806 2.191 2.653 25 1.282 1.641 2.094 2.666 3.386 30 1.318 1.811 2.127 3.213 1.322 40 1.489 2.208 3.262 4.801 7.040 11.467 50 1.645 2.692 4.384 7.107 Period 1 1.120 1.130 1.140 1.150 1.160 2 1.254 1.277 1.300 1.323 1.346 3 1.405 1.443 1.482 1.521 1.561 4 1.574 1.630 1.689 1.749 1.811 5 1.762 1.842 1.925 2.011 2.100 6 1.974 2.082 2.195 2.313 2.436 7 2.211 2.353 2.502 2.660 2.826 8 2.476 2.658 2.853 3.059 3.278 9 2.773 3.004 3.252 3.518 3.803 10 3.106 3.395 3.707 4.046 4.411 11 3.179 3.836 1.226 4.652 5.117 12 3.896 4.335 4.818 5.350 5.936 13 4.363 4.898 5.492 6.153 6.886 14 1.887 5.535 6.261 7.076 7.988 15 5.474 6.254 7.138 8.137 9.266 16 6.130 7.067 8.137 9.358 10.748 17 6.866 7.986 9.276 10.761 12.168 18 7.690 9.024 10.575 12.375 14.463 19 8.613 10.197 12.056 14.232 16.777 20 9.616 11.523 13.713 16.367 19.461 25 17.000 21.231 26.462 32.919 40.874 30 29.960 39.116 50.950 66.212 85.850 10 93.051 132.782 188.884 267.861 378.721 50 289.002 450.736 700.233 1083.657 1670.704 12% 13% 14% 15% 16% 1.060 1.124 1.191 1.262 1.338 1.419 1.504 1.594 1.689 1.791 1.898 2.012 2.133 2.261 2.397 2.510 2.693 2.854 3.026 3.207 4.292 5.713 10.286 18.420 1.170 1.369 1.602 1.874 2.192 2.565 3.001 3.511 4.108 4.807 5.624 6.580 7.699 9.007 10.539 12.330 11.126 16.879 19.748 23.106 50.658 111.065 533.869 2566.215 17% 7% 1.070 1.145 1.225 1.311 1.403 1.501 1.606 1.718 1.838 1.967 2.105 2.252 2.410 2.579 2.759 2.952 3.159 3.380 3.617 3.870 5.427 7.612 14.974 29.457 18% 1.180 1.392 1.643 1.939 2.288 2.700 3.185 3.759 4.435 5.234 6.176 7.288 8.599 10.117 11.974 14.129 16.672 19.673 23.214 27.393 62.669 143.371 750.378 3927.357 8% 1.080 1.166 1.260 1.360 1.469 1.507 1.714 1.851 1.999 2.159 2.332 2.518 2.720 2.937 3.172 3.126 3.700 3.996 1.316 4.661 6.848 10.063 21.725 46.902 19% 1.190 1.416 1.685 2.005 2.386 2.840 3.379 1.021 4.785 5.695 6.777 8.064 9.596 11.420 13.590 16.172 19.211 22.901 27.252 32.129 77.388 184.675 1051.668 5988.914 9% 1.090 1.188 1.100 1.110 1.210 1.232 1.295 1.331 1.368 1.412 1.464 1.518 1.539 1.611 1.685 1.677 1.772 1.870 1.828 1.949 2.076 1.993 2.144 2.305 2.358 2.558 2.172 2.367 2.839 2.580 2.591 2.853 3.138 3.152 3.498 2.813 3.066 3.452 3.883 3.342 3.797 4.310 3.642 4.177 4.785 3.970 1.595 5.311 4.328 5.054 5.895 4.717 5.560 6.544 5.112 6.116 7.263 5.604 6.727 8.062 8.623 10.835 13.585 22.892 13.268 31.409 74.358 17.119 45.259 117.391 65.001 184.565 1.200 1.250 1.300 1.440 1.563 1.690 1.728 1.953 2.197 2.074 2.441 2.856 2.488 3.052 3.713 2.986 3.815 4.827 3.583 4.768 6.275 1.300 5.960 8.157 5.160 7.451 10.604 6.192 9.313 13.786 7.430 11.612 17.922 8.916 14.552 23.298 10.699 18.190 30.288 12.839 22.737 39.371 15.407 28.422 51.186 18.488 35.527 66.542 22.186 41.109 86.501 26.623 55.511 112.455 31.948 69.389 146.192 38.338 86.736 190.050 95.396 264.698 705.641 237.376 807.794 2619.996 1169.772 7523.161 36118.865 9100.438 70064.923 497929.223 10% 20% 11% 25% 30%
