Assume you want to retire early at age 54 You plan to save using one of the following two strategies: (1) save $4,500 a year in an IRA beginning when you are 24 and ending when you are 54 (30 years) or (2) wait until you are 39 to start saving and then save $9,000 per year for the next 15 years. Assume you will earn the historic stock market average of 10% per year (Click the icon to view the future value annuity factor table.) (Click the icon to view the future value factor table) Click the icon to view the present value annuity factor table.) (Click the icon to view the present value factor table) Read the requirements Requirement Calculate how i Requirements - X Option 1 1. How much out-of-pocket cash will you invest under the two options? 2. How much savings will you have accumulated at age 54 under the two options? 3. Explain the results 4. If you let the savings continue to grow for eight more years with no further out-of-pocket investments), under each scenario, what will the investment be worth when you are age 62? Done Print Done Enter any number in the edit fields and then click Check Answer 2 i Reference Future Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% Period 1.000 1.000 1.000 1.000 1.000 1000 1.000 1.000 1.000 14% 1.000 16% 1.000 18% 1.000 2.160 2. 180 3.506 3572 5 066 5.215 6.877 7154 8.977 9.442 Period 2010 2020 2030 2040 2050 2060 2.080 2.100 2.120 2140 2 Period 3 030 3060 3 0913.122 3.153 3.1843.2463.310 3.374 3.440 3 Period 4.060 4.122 4.184 4.246 4.3104 375 4.5064.641 4.779 4.921 4 Period 5.101 52045.309 5.416 5.526 5.637 5 867 6.105 | 6.353 6.610 5 Period 6.152 6.308 6.4686.633 6.802 6.975 7336 7.716 8.115 8 536 6 Period 72147434 766217 898 8.142 8.394 8 923 9.487 10.089 10.730 7 Period 8.286 8.583 8 8929.214 9.5499 897 10.637 11.43612 300 13 233 8 Period 9.369 9.755 10.15910 583 11.027 11 49112.488 13.579 14 776 16.085 9 Period 10.462 10.950 11.464 12.000 12.578 13.181 14.487|15.93717 549 19.337 10 Period 11.567 12 16912 80813 486 14.20714 97216.645 18.531 20.655 23 045 11.414 12 142 14 240 15.327 17 519 19.086 21 321 23.521 25.733 28.755 mt Print Done FOTOTY 2% 4% 5% 16% Present Value of Annuity of $1 Periods 1% 3% 6% 8% 10% 12% 14% 18% 20% Period 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 Period 2 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.6901.6471 605 1.566 1.528 Period 3 2.941 2 884 2.829 2.775 2.723 2.6732 577 2.487 2.4022.322 2246 2.174 2.106 Period 4 3.902 3.808 3.717 3.630 3.546 3.4653 312 3.170 3.037 2.914 2.798 2.690 2.589 Period 5 4.853 4.713 4.5804452 4.329 4.212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 Period 6 5.795 5.601 5 417 5.242 5.076 4.917 4.623 4.355 4 111 3.8893.685 3.498 3.326 Period 7 6.728 6.472 6.230 6.0025.786 5.582 5.206 4.868 4.564 4.28840393.812 3.605 Period 87.652 7.325 7020 6.733 6.463 6210 5 747 5.335 4.9684.639 4.344 4.078 3.837 Period 9 8.566 8.162 7.786 7.435 7 108 6.802 6 247 5.759 53284.9464.607 4.303 4.031 Period 9.471 8.983 8.530 8.1117.722 7.360 6.710 6.145 5.6505.216 4.833 4.494 4.192 10 Period 10.368 9.787 9253 8.760 8.306 7 887 7 139 6.495 5.938 5 453 5.029 4.656 4.327 11 Period 11 255 10.575 9 954 9 385 8.863 8.384 7536 6.814 6 1945 660 5.197 4.793 4.439 12 Period 12.134 11 348 10.635 9.986 9.3948 853 7.9047 103 6.4245.842 5.342 4.910 4.533 13 Period 13.004 12.10611296 10 563 9.899 9.295 8.244 7 3676 628 6.002 5.468 5.0084611 14 Period 13.865 12 849 11.938 11. 11810.3809712 8.559 7 606 6.811 | 6 142 5.575 5.092 4.675 15 Period 118 046116 351/14 877 13.590 12 462 11 470 9.818 18.514 7 469 6.623 15 929 53534 870 Drint none i Reference - X Future Value of $1 16% Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 18% 20 Period 1 1.010 1.020 1.030 1.040 1.050 1.000 1.080 1.100 1 120 1.140 1 160 1. 180 12 Period 2 1.020 1040 1.0611082 1.103 1.124 1.166 1.210 1.254 1.300 1.346 1.392 1.4 Period 3 1.030 1.061 1.0931125 1.158 1.191 1.260 1.331 1.405 1.482 1.561 1.643 1.7 Period 4 1.041 1.082 1.126 1.1701 216 1.262 1.360 1.464 1.574 1.6891.811 1.939 20 Period 5 10511.104 1.1591.217 1 276 1.338 1.469 1.611 1.762 1.925 2.100 2.288 2.4 Period 6 1.062 1126 1 194 1.265 1340 1.419 1.587 1.772 1.9742.195 2.436 2 700 29 Period 7 1.0721149 12301.316 1.407 1.504 1714 1.949 2211 2.502 2 826 3.185 35 Period 8 1.0831 172 1 267 1.369 1.477 1.5941.851 2 144 2.476 2.853 3 278 3.759 4.3 Period 9 1.0941 195 1.305 1.423 1.551 16891.999 2.358 2.773 3 252 3 803 4.435 5.1 Period 1.1051 219 1 3441 480 1.629 1791 2.159 2 594 3.106 3.707 4.411 5.234 6.1 10 Period 1.116 1.243 1 384 1.539 1710 1 898 2.3322 853 3.479 4.226 5 117 6.176 74 11 Period 1.1271 268 1.4261 601 1 796 2012 2.518 3.138 3.896 4 818 5.9367288 12 Period 1.1381.294 1.4691665 1.886 2.133 2720 3.452 4.363 5.492 6 886 8.599 10 13 Period 1.149|1.319 15131 732 1.980 2261 2.937 3.797 4.887 6261 7.988 10.147 128 14 Period 1.1611.346 1.558 1.801 2.079 2.397 3.172 4.177 5.474 7 138 9 266 11 974 8.9 154 15 Print Done 0 Reference 4% 5% Present Value of $1 Periods 1% 2% 3% 6% 8% 10% 12% 14% 16% 18% 20% Period 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 Period 2 0.980 0.9610.943 0 925 0.9070.890 0.857 0.826 0.797 0.769 0.743 0.7180 694 Period 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 Period 4 0.961 0.9240.888 0.855 0.823 0.792 0.735 0.683 0.636 0.592 0.552 0.516 0.482 Period 5 0.951 0.906 0.863 0.822 0.784 0.7470.681 0.621 0.567 0.519 0.476 0.437 0.402 Period 6 0.942 0.888 0.837 0 7900 746 0.705 0.630 0.564 0.507 0.456 0.410 0.370 0.335 Period 70.933 0.8710.813 0.760 0.7110.665 0.583 0.513 0.452 0.400 0354 0.314 0.279 Period 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 Period 9 0.9140.837 0.766 0.703 0.6450.592 0.500 0.424 0.361 0.308 0.263 0 225 0.194 Period 0.905 0.820 0.744 0.676 0.614 0.558 0.463 0.386 0.322 0 270 0.227 0 191 0.162 10 Period 0.896 0.8040.722 0.650 0.585 0.527 0.429 0.350 0.287 0.237 0 195 0.162 0 135 11 Period 0.8870.788 0.701 0 625 05570 497 0.397 0.319 0.2570 2080 168 0.137 0.112 12 Period 0.879 0.773 0.681 0 601 0.530 0.4690 368 0.290 0.229 0.182 0 145 0.116 0.093 13 Period 0.870 0.758 0.661 0.577 0.505 0.442 0.340 0.263 0.205 0.160 0.125 0.099 0.078 14 Period 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 15 Period L0 820 10 673 10554 0.456.0.377 031210 215 0.149.10 104 10.073.10.051 0.037 0.026 Print Done TIET
