QUESTION 1 Leon wants to start saving for retirement. He estimates that he will withdraw $144,000 per year, at the beginning of every year, during retirement. His money will earn 6% (APR) during this time. Additionally, he expects for his retirement to last 30 years. At the end of his retirement, Leon would also like to donate $750,000 to charity. He currently has $250,000 in savings that he will invest in an account that pays 9% APR. If Leon has 18 years until retirement, what is the yearly investment he needs to make to reach his goal? Assume that the contributions will be made at the end of the year. Additionally, please construct the following: 1. A table that shows the yearly contributions made by Leon to reach his retirement goal (i.e., prior to retirement). Hint: The ending balance should equal the amount he needs to save for retirement. 2. A table that shows the year-by-year balance on the account after retirement. Hint: At the end of the 30 th year, the balance should be equal to zero after the contribution to charity. SOLUTION: POST-RETIREMENT TABLE Year Beginning Balance Yearly Withdrawal Interest Donation Ending Balance 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 SOLUTION: FINDING THE YEARLY INVESTMENTS SOLUTION: PRE-RETIREMENT TABLE QUESTION 1 Leon wants to start saving for retirement. He estimates that he will withdraw $144,000 per year, at the beginning of every year, during retirement. His money will earn 6% (APR) during this time. Additionally, he expects for his retirement to last 30 years. At the end of his retirement, Leon would also like to donate $750,000 to charity. He currently has $250,000 in savings that he will invest in an account that pays 9% APR. If Leon has 18 years until retirement, what is the yearly investment he needs to make to reach his goal? Assume that the contributions will be made at the end of the year. Additionally, please construct the following: 1. A table that shows the yearly contributions made by Leon to reach his retirement goal (i.e., prior to retirement). Hint: The ending balance should equal the amount he needs to save for retirement. 2. A table that shows the year-by-year balance on the account after retirement. Hint: At the end of the 30 th year, the balance should be equal to zero after the contribution to charity. SOLUTION: POST-RETIREMENT TABLE Year Beginning Balance Yearly Withdrawal Interest Donation Ending Balance 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 SOLUTION: FINDING THE YEARLY INVESTMENTS SOLUTION: PRE-RETIREMENT TABLE