Reference Present Value of Annuity of $1 Periods 1% 2% 36 4% 8% 10% 12% 14% 16% 18% 20% 5% 6% 1 0.990 0.980 0.971 0.952 0.943 0.926 0.893 0.877 0.862 0.833 0.962 0.909 0.847 1.970 1.942 1.886 1.647 1.605 2 1.913 1.859 1.833 1.783 1.736 1.690 1.566 1.528 3 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 2.322 2.246 2.174 2.106 2.589 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.798 2.690 5 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 6 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 3.889 3.685 3.498 3.326 7 6.728 6.472 6.230 6.002 5.786 5.582 5.206 4.868 4.564 4.288 4.039 3.812 3.605 8 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 4.639 4.344 4.078 3.837 7.108 5.759 8.566 7.435 6.802 6.247 5.328 4.946 4.607 4.031 8.162 7.786 4.303 10 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 5.216 4.833 4.192 9.471 4.494 10.368 9.787 9.253 11 8.760 8.306 7.887 7.139 6.495 5.938 5.453 5.029 4.656 4.327 12 9.385 8.863 7.536 6.194 5.660 5.197 4.793 4.439 11.255 10.575 9.954 8.384 6.814 12.134 11.34810.6359.986 13.004 12.106 11.29610.5639.899 13.865 | 12.849| 11.938|11.118|10.380| 9.712 13 4.533 9.394 8.853 7.904 7.103 6.424 5.842 5.342 4.910 14 9.295 8.244 7.367 6.628 6.002 5.468 5.008 4.611 7.606 6.142 5.575 4.675 15 8.559 6.811 5.092 18.046 16.351|14.87713.59012.462 11.4709.818 22.023 19.52317.41315.622 14.094|12.78310.6759.077 25.808 22.396 19.600 17.292| 15.372|13.76511.2589.427 32.835 27.355 23.11519.79317.159| 15.046|11.9259.779 6.623 20 8.514 7.469 5.929 5.353 4.870 25 7.843 6.873 6.097 5.467 4.948 30 8.055 7.003 6.177 5.517 4.979 40 8.244 7.105 6.233 5.548 4.997 Reference Present Value of $1 Periods 29% 4% 20% 1% 3% 5% 6% 8% 10% 12% 14% 16% 18% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.961 0.943 0.925 0.907 0.857 0.826 0.797 0.743 2 0.980 0.890 0.769 0.718 0.694 3 0.971 0.942 0.915 0.889 0.864 0.840 0.794 0.751 0.712 0.675 0.641 0.609 0.579 4 0.924 0.516 0.961 0.888 0.855 0.823 0.792 0.735 0.683 0.636 0.592 0.552 0.482 0.906 5 0.951 0.863 0.822 0.784 0.747 0.681 0.621 0.567 0.519 0.476 0.437 0.402 6 0.410 0.942 0.888 0.837 0.790 0.746 0.705 0.630 0.564 0.507 0.456 0.370 0.335 0.760 0.665 7 0.933 0.813 0.400 0.354 0.871 0.711 0.583 0.513 0.452 0.314 0.279 8 0.923 0.853 0.789 0.731 0.677 0.627 0.540 0.467 0.404 0.351 0.305 0.266 0.233 0.361 9 0.914 0.837 0.766 0.703 0.645 0.592 0.500 0.424 0.308 0.263 0.225 0.194 10 0.905 0.820 0.744 0.614 0.558 0.463 0.386 0.322 0.270 0.162 0.676 0.227 0.191 11 0.896 0.804 0.722 0.650 0.585 0.527 0.429 0.350 0.287 0.237 0.195 0.162 0.135 12 0.887 0.788 0.701 0.625 0.557 0.497 0.397 0.319 0.257 0.208 0.168 0.137 0.112 13 0.879 0.773 0.681 0.601 0.530 0.469 0.368 0.290 0.229 0.182 0.145 0.116 0.093 14 0.870 0.758 0.661 0.577 0.505 0.340 0.263 0.160 0.125 0.099 0.078 0.442 0.205 15 0.861 0.743 0.642 0.555 0.481 0.417 0.315 0.239 0.183 0.140 0.108 0.084 0.065 20 0.820 0.673 0.554 0.456 0.377 0.312 0.215 0.149 0.104 0.073 0.051 0.037 0.026 0.233 0.059 0.038 0.016 25 0.780 0.610 0.478 0.375 0.295 0.146 0.092 0.024 0.010 0.004 30 0.742 0.552 0.412 0.308 0.231 0.174 0.099 0.057 0.033 0.020 0.012 0.007 40 0.672 0.453 0.307 0.208 0.142 0.097 0.046 0.022 0.011 0.005 0.003 0.001 0.001 Reference Future Value of $1 Periods 29% 3% 46 5% 8% 10% 12% 14% 16% 18% 20% 19% 6% 1.010 1.020 1.030 1.040 1.050 1.060 1.080 1.100 1.120 1.140 1.160 1.180 1.200 1 2 1.020 1.040 1.061 1.082 1.103 1.124 1.166 1.210 1.254 1.300 1.346 1.392 1.440 3 1.030 1.061 1.093 1.158 1.260 1.331 1.482 1.728 1.125 1.191 1.405 1.561 1.643 4 1.041 1.126 1.262 1.811 2.074 1.082 1.170 1.216 1.360 1.464 1.574 1.689 1.939 1.051 1.104 1.159 1.217 1.276 1.338 1.469 1.611 1.762 1.925 2.100 2.288 2.488 6 1.062 1.126 1.194 1.265 1.340 1.419 1.587 1.772 1.974 2.195 2.436 2.700 2.986 1.072 1.149 1.230 1.316 1.407 1.504 1.714 1.949 2.211 2.502 2.826 3.185 3.583 3.759 8 1.083 1.172 1.267 1.369 1.477 1.594 1.851 2.144 2.476 2.853 3.278 4.300 9 1.094 1.195 1.305 1.423 1.551 1.689 1.999 2.358 2.773 3.252 3.803 4.435 5.160 6.192 10 1.105 1.219 1.344 1.480 1.629 1.791 2.159 2.594 3.106 3.707 4.411 5.234 11 1.116 1.243 1.384 1.539 1.710 1.898 2.332 2.853 3.479 4.226 5.117 6.176 7.430 12 1.127 1.268 1.796 2.012 2.518 3.896 4.818 5.936 7.288 8.916 1.426 1.601 3.138 13 1.138 1.469 1.886 2.133 2.720 4.363 10.699 1.294 1.665 3.452 5.492 6.886 8.599 14 1.149 1.319 1.513 1.732 1.980 2.937 3.797 4.887 2.261 6.261 7.988 10.147 12.839 1.558 3.172 7.138 9.266 15 1.161 1.346 1.801 2.079 2.397 4.177 5.474 11.974 15.407 20 1.220 1.486 1.806 2.191 2.653 3.207 4.661 6.727 9.646 13.743 19.461 27.393 38.338 1.282 25 1.641 2.094 2.666 3.386 4.292 6.848 10.835 17.000 26.462 40.874 62.669 95.396 30 1.348 1.811 2.427 3.243 4.322 10.063 50.950 5.743 17.449 29.960 85.850 143.371 237.376 40 1,469.772 2.208 3.262 4.801 93.051 1.489 7.040 10.286 21.725 45.259 188.884 378.721 750.378 You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to draw $210,000 per year for the next 30 years (based on family history, you think you'll live to equal annual installments (from age 30 to age 40) into a fairly risky investment fund that you expect will earn 10 % per year. You will leave the money in this fund until it is completely depleted when vou are 70 vears old. (Click the icon to view the present value annuity table. (Click the icon to view the future value annuity table. (Click the icon (Click the icon to view the present value table." view the future value table.) o make your plan work answer the following questions (Click the icon to view the questions.) . How much money must you accumulate by retirement? (Hint: Find the present value of the $210,000 withdrawals.) Calculate the present value to find out how much money must be accumulated by retirement. (Round your answer to the nearest whole dollar.) The present value is $ 2. How does this amount compare othe total amount you will draw out of the investment during retirement? How can these numbers be so different? . However, by age 40 you only need to have invested Over the course of your retirement you will be withdrawing S These numbers are different because: O A. You need to have far more accumulated than what you will withdraw because you will withdraw a large portion of the investment every year-the balance remains invested where it continues to earn 10 % interest. O B. You need to have the same accumulated as you will withdraw because you will not eam further interest on your investment when you reach retirement. O C. earn 10 % interest. You need to have far less accumulated than what you will withdraw because you only withdraw portion of the investment every year-the balance remains invested where it continues O D. None of the above. 3. How much must you pay into the investment each year for the first ten years? (Hint: Your answer from Requirement 1 becomes the future value of this annuity.) (Round your answer to the nearest whole dollar.) into the investment each year for the first ten years. You must pay $ 4. How does the total out-of-pocket savings compare to the investment's value at the end of the ten-year savingss period and the withdrawals you will make during retirement? (Use the investment rounded to the nearest whole number that vou calculated above, then round vour final answer the nearest whole dollar) than the investment's worth The total out-of-pocket savings amounts to $ This is far t the end than the amount of money you will eventually withdraw from the investment. of ten years and remarkably