Ruby is 25 and has a good job at a biotechnology company. She currently has $8,600 in an IRA, an important part of her retirement nest egg. She believes her IRA will grow at an annual rate of 8 percent, and she plans to leave it untouched until she retires at age 65. Ruby estimates that she will need $875,000 in her total retirement nest egg by the time she is 65 in order to have retirement income of $20,000 a year (she expects that Social Security will pay her an additional $15,000 a year). Using Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D, answer the following questions. a. How much will Ruby's IRA be worth when she needs to start withdrawing money from it when she retires? (Round discount factor to 3 decimal places and final answer to the nearest whole dollar.) Worth of IRA b. How much money will she have to accumulate in her company's 401(k) plan over the next 40 years in order to reach her retirement income goal? (Round discount factor to 3 decimal places and final answer to the nearest whole dollar.) Money to accumulate Exhibit 1-A Future Value (Compounded Sum) of S1 after a Given Number of Time Periods 2% Period 1 2 3 1.020 1.040 1.061 10% 1.100 1.210 1.331 1.46 4 5 1.982 6 7 8 9 19 19 11 4 12 13 14 15 16 17 18 19 -- 20 25 30 40 50 1% 1.010 1.020 1.030 1.041 2:04 1.051 2:02 1.062 2.00 1.472 2014 1.083 2002 1.094 1024 1.105 1.116 *** 1.127 1.138 1.149 1.161 4:20 1.173 1.184 1.196 1.208 Sado 1.220 1.282 1.348 1.489 200 1.645 1. 104 4:10 1.126 12 1.149 1.172 1.195 122 1.219 2012 1.243 1.268 m2 1.294 1.319 1.346 1.373 1.400 1.428 Since 1.457 1.486 1.641 1.811 2.208 2.692 3% 1.030 1.061 1.093 1.126 1.126 1.159 2:22 1. 194 3:12 1.230 SEO 1. 267 2:207 1.305 2 1. 344 1.384 1.426 1.469 1.513 1.558 1.605 1.653 1.702 * 1.754 1.806 2.094 2.427 3.262 4.384 4% 1.040 1.682 1.125 1. 179 17 1:21 1.217 1.265 3:30 1.316 5310 1.369 30% 1.423 1.480 1.539 1.601 1.665 1.732 . 1.801 1.873 1.948 2.26 co 2.107 2.191 2.666 3.243 4.801 7.107 5% 1.050 1.103 1.158 1.216 1.216 1.276 are 1.340 30 1.407 B01 1.477 1.551 1.629 BRUGE 1.710 4 1.796 1.886 1.989 2.079 se 2.18 4:10 2.292 2.407 2.527 2.653 3.386 4.322 7.040 11.467 6% 1.060 1. 124 1.191 1.262 1.33 5.336 1.419 S. 1.504 20 1.594 4:39+ 1.689 OP 1.791 1.898 2.012 2.133 2 2.261 2.397 22 2.540 2.693 2.854 3.026 3.207 4.292 5.743 10.286 18.420 7% 1.070 1.145 1.225 1.311 2.311 1.403 2.402 1.501 31201 1.606 Side 1.718 1.838 2100 1.967 4:24 2.105 112 2.252 12 2.410 2.579 12 2.759 S02 2.952 3.159 12 3.380 3.617 12 3.87 5.427 7.612 14.974 29.457 8% 1.080 1.166 1.260 1.360 1.360 1.469 2:10 1.587 201 1.714 S: 1.851 41022 1.999 2:22 2.159 113 2.332 E123 2.518 - 2.720 2.937 -- 3.172 are 3.426 3.700 3.996 4.316 4.661 6.848 10.063 21.725 46.902 9% 1.090 1.188 1.295 1.412 1.914 1.539 1.672 S. 1.828 SOCO 1.993 5.222 2.172 31172 2.367 120 2.580 - 2.813 3.066 3.342 3.642 3.970 4.328 4.717 5.142 1 5.604 8.623 13.268 31.409 74.358 1.611 2017 1.772 114 1.949 5:31 2.144 2.1 2.358 41230 2.594 41229 2.853 1022 3.138 10 3.452 co 3.797 . 4.177 4.595 1 5.054 an 5.560 6.116 6.727 10.835 17.449 45.259 117.390 11% 1.110 1.232 1.368 1.518 1.518 1.685 2:002 1.870 5.070 2.076 5:01 2.305 21302 2.558 2:330 2.839 2.024 3.152 142 3.498 2014 3.883 4.310 4.785 40 5.311 . 5.895 6.544 2 7.263 8.062 13.585 22.892 65.001 184.57e 12% 14% 15% 17% 20% Period 1 19% 1.190 1.150 1.170 1.200 2 1.120 1.254 1.405 1.574 1.140 1.300 1.482 1.689 1.323 1.416 1.685 2 6 2 10 10 11 1 12 2 13 4 14 13% 1.130 1.277 1.443 1.630 1.680 1.843 1.842 2. ARS 2.082 2 253 2:353 2.658 2.050 3.004 S.00 3.395 3:32 3.836 3.030 4.335 23 4.898 5.535 6.254 . 7.067 7.986 1.709 9.024 2.0 10.197 11.523 21.231 39.116 132.780 450.740 1.262 1.762 1.074 1.979 2.211 2:211 2.476 21170 2.773 2.113 3.106 3.100 3.479 3.1979 3.896 3:02 4.363 7:30 4.887 7:00 5.474 2.141 6.130 9:12 6.866 9.000 7.690 101 8.613 9.646 17.000 29.960 93.051 289.000 1.521 1.249 1.749 2.011 2:011 2313 2.315 2.666 2.000 3.059 3.09 3.518 3.310 4.046 +1040 4.652 .034 5.350 3330 6.153 122 7.076 12 8.137 22 9.358 10.761 wa 12.375 14.232 16.367 32.919 66.212 267.860 1,083.700 1.925 1.925 2105 2:19 2.50 2.902 2.853 2:03 3.252 3:124 3.707 sur 4.226 LEO 4.818 2010 5.492 an 6.261 7.138 8.137 2 9.276 - 10.575 12 12.056 13.743 26.462 50.950 188.880 700.230 16% 1.160 1.346 1.561 1.811 1.811 2.100 2.100 2.436 2.436 2.826 21626 3.228 3:27 3.803 3.003 4.411 12 5.117 3.11 5.936 3.230 6.886 Vio 7.988 11 9.266 2.600 10.748 10:40 12.468 14.463 16.777 2014 2.0 19.461 40.874 85.850 378.720 1,670.700 1.369 1.602 1.874 2192 2.192 2.565 21303 2. 201 2.00 3.511 3.311 4.108 1100 4.807 1007 5.624 3:02 6.580 Vio 7.699 9.007 -100 10.539 12.33e 141339 14.42 14:22 16.879 19.748 23.10 50.658 111.070 533.870 2,566.200 18% 1.189 1.392 1.643 1.939 2.288 2.288 2.700 2.700 3.185 3.103 3.759 3:13 4.435 7.132 5.234 3:23 6.176 Wire 7.288 1200 8.599 D 10.147 10.147 11.974 12 14.129 12 16.672 10. 19.673 23.214 27.393 62.669 143.370 750.389 3,927.400 1.440 1.728 2.074 2.488 2.488 2.986 2.960 3.583 31303 4.300 5.160 3.100 6.192 0.174 7.430 1.1729 8.916 9.22 10.699 12.839 15.407 18.488 10.100 22.186 SELAM 26.623 AVE 31.948 38.338 95.396 237.380 1,469.800 9, 100.400 2.00 2.005 3 286 2:380 2.800 2.040 3.270 3:379 4.021 2:02 4.785 102 5.696 2.00 6.777 0 8.064 Di 9.596 2130 11.420 13.20 13.590 12:20 16.172 19,244 22.091 27.252 32.429 77.388 184.680 1,051.700 5,998.900 100 25% 1.250 1.563 1.953 2.441 3.05 3.052 3.815 3.615 4.768 1.700 5.960 3.700 7.451 1.31 9.313 9.312 11.642 11.044 14.552 14:22 18.190 10:12 22.737 28.422 ATE 35.527 BLUE 44.409 --- 55.511 --- 69.389 20 86.736 264.700 807.790 7,523.200 70,065.000 30% 1.300 1.690 2.197 2.856 3.213 3.713 4.822 4.827 6.276 0.276 8.157 0.137 10.604 10.00 13.786 12:00 17.922 17:22 23.298 23:290 30.288 wito 39.374 21 51.186 66.542 86.504 112.460 146.190 190.050 705.640 2,620.000 36,119.000 497,929.000 15 16 40 17 18 19 2e 25 30 46 50 Exhibit 1-B Future Value Compounded Sum) of $1 Paid In at the End of Each Period for a Given Number of Time Periods (an Annuity) Period 1 2 3 2 4 5 5% 1.000 2.050 6% 1.000 2.060 3.153 3.184 6 7 -- 8 10. 1% 1.000 2.010 3.030 4.860 1.000 5.101 3.101 6.152 9:12 7.214 SET 8.286 200 9.369 21:30 10.462 16 11.567 12.683 13.809 14.947 16.097 17.258 e 18.430 . 19.615 12 20.811 10:02 22.019 28.243 34.785 48.886 64.463 3% 1.000 2.30 3.691 4.189 4.184 5.309 3:30 6.468 9.00 7.662 S002 8.892 0.022 10. 159 22 11.464 12.90 12.888 14.000 14.192 1122 15.618 17.686 9 16 20 11 * 12 2% 1.000 2.020 3.060 4.122 5.204 3:20 6.308 9.00 7.434 124 8.583 2:02 9.755 21122 10.950 10:20 12.169 22:10 13.412 14.680 15.974 17.293 1. 18.639 1 20.012 21.412 22.841 24.297 32.30 40.588 60.402 84.579 4% 1.000 2.040 3.122 4.246 4:240 5.416 3.410 6.633 0.02 7.898 1.020 9.214 2.214 10.583 10:30 12.00 13.486 12.100 15.026 16.627 18.292 20.024 21.825 23.698 25.645 27.671 29.778 41.646 56.085 95.26 152.670 4.310 7310 5.526 21260 6.802 9.00 8. 142 9:24 9.549 2:37 11.027 1024 12.578 1270 14.207 15.917 ---- 17.713 19.599 200 21.579 23.657 25.840 28.132 30.539 33.066 47.727 66.439 120.800 209.350 7% 1.000 2.070 3.215 4.440 4.440 5.751 3:13 7.153 1122 8.654 0.034 19.260 10.200 11.978 400 13.816 12.00 15.784 17.888 20.141 22.550 25.129 14 27.888 30.840 33.999 12 37.379 40.999 63.249 94.461 199.640 406.530 4.375 +372 5.637 2:02 6.975 9:12 8.394 22+ 9.897 2.09% 11.491 24 13.181 12:10 14.972 12 16.870 18.882 21.015 23.276 25.673 28.213 30.906 33.760 end 36.786 54.865 79.058 154.760 290.340 8% 1.000 2.080 3.246 4.596 .506 5.867 3.007 7.336 1230 8.923 0.222 10.637 12:48 12.488 14.487 14:07 16.645 10.042 18.977 10:24 21.495 14:22 24.215 27.152 142 30.324 33.750 37.450 2014 41.446 45.762 73.106 113.280 259.060 573.770 9% 1.000 2.090 3. 278 4.573 4:373 5.985 9.202 7.523 --- 9.200 2:200 11.620 11.028 13.021 13.621 15.193 12:19 17.560 20.141 22.953 12 26.019 29.361 2014 33.003 36.974 41.301 46.018 51.160 84.701 136.310 337.890 815.080 10% 1.000 2.100 3.310 4.641 1.041 6. 105 92102 7.716 -4 9.482 AT 11.430 11.436 13.579 12:37 15.937 12:37 18.531 10:33 21.384 24.523 22 27.975 31.772 ---- 35.950 40.545 45.599 2012 51.159 57.275 98.347 164.490 442.590 1,163.900 11% 1.000 2.110 3.342 4.710 1.710 6.228 DLO 7.913 1.223 9.783 2.702 11.859 12:03 14.164 Set 16.722 10:24 19.561 22 22.713 --- 26.212 14 30.095 se 34.405 39.190 44.501 50.396 56.939 wiec 64.203 114.410 199.020 581.830 1,668.800 13 14 15 - 16 17 18 19 20 25 30 18.599 20.157 21.762 sere 23.414 25.117 42222 26.870 36.459 47.575 75.401 112.800 40 50 13% 17% Period 1 1.000 2 16% 1.000 2.160 3.506 5.066 1.000 2.170 3.539 9 6.827 2 5 2 11.12 o 12% 1.000 2.120 3.374 4.779 4.779 6.353 6.353 8. 115 8.115 10.089 22.300 14.776 14:10 17.549 1:32 20.655 0.022 24.133 ST122 28.029 S. 32.393 261322 37.280 SEBU 42.753 22 48.884 55.750 63,440 2 72.052 133.330 241.330 767.990 2,400.000 2.130 3.407 4.850 6.480 0.980 8.323 8.329 10.405 10.405 12.252 12:757 15.416 13:1910 18.420 10:20 21.814 21.019 25.650 13.030 29.985 34.883 40.417 46.672 0.09 53.739 61.725 70.749 80.947 155.620 293.200 1,013.700 3,459.500 10 11 12 13 14 15 16 17 18 19 20 25 30 40 50 14% 1.000 2.140 3.440 4.921 6.614 6.610 8.536 0.530 10.730 10.750 13.233 13:233 16.085 10.00 19.337 19:33 23.045 23.049 27.271 21 32.089 Jan 37.581 01002 43.842 10 50.980 201200 59, 118 68. 394 78.969 91.025 ** 181.870 356.790 1,342.000 4,994.500 15% 1.000 2.150 3.473 4.993 4.995 6.242 0.742 8.254 8.754 11.067 11.067 13.727 19.727 16.78 10.760 20.304 20:30 24.349 27:37 29.002 2.004 34,352 22 40.505 47.589 2013 55.717 32 02.00 65.075 75.836 P.030 88.212 102.440 212.790 434.750 1,779.100 7,217.700 8.77 11.414 14.240 14.00 17.519 17:31 21.321 12:24 25.733 30.850 36.786 43.672 1074 51.660 32 60.925 22 71.673 84.141 98.603 115.380 249.210 530.310 2,360.800 10,436.000 18% 1.000 2.180 3.572 5.215 3.215 7.154 1.154 9.440 9.442 12.142 12:142 15.327 15:327 19.086 12.000 23.521 23:32 28.255 20:32 34.931 22 42.219 LA 50.818 12 60.965 010 72.939 1622 0.000 87.068 103.740 123.410 way 146.630 342.600 790.950 4,163.210 21,813.000 5.141 7.14 7.014 9.207 9.202 11.772 12:17 14.773 14.173 18:20 18.285 22.393 221322 27.200 21:200 32.824 1024 39.404 2010 47. 103 14 56. 110 ay 66.649 10:04 78.979 RE 93.406 110.290 re 130.030 200 292.110 647.440 3,134.500 15,090.000 19% 1.000 2.190 3.606 5.291 5.291 7.297 1:297 9.683 9.689 12.523 12.523 15.902 19.923 19.923 24.701 10 A. 404 NO.704 37.180 200 45.244 54.841 66.261 79.850 96.022 AVEC 115.270 12. 138.170 165.420 402.040 966.700 5,529.800 31,515.000 20% 1.000 2.200 3.640 5.368 5.368 7.442 7.442 9.90 9.950 12.016 12.916 16.499 10.499 20.799 40:19 25.959 23.33% 32. 15A 32.190 39.581 22:30 48.497 59. 196 72.035 87.442 105.930 02:20 128.120 die 154.740 186.690 471.980 1,181.900 7,343.900 45,497.000 30. 25% 1.000 2.250 3.813 5.766 8.282 8.207 11.259 11.259 15.07 19.072 19.842 19.642 25.802 23:00 33.253 33:49 42.566 +21300 54.208 rico 68.760 . 86.949 00:30 109.690 22.02 138.110 173.640 09 218.050 273.560 342.950 1,054.800 3,227.200 30,089.000 80,256.000 30% 1.000 2.300 3.990 6.187 9.043 9.043 12.730 17.583 17.583 23.85 23.856 32.015 34.013 42.619 E.022 56.405 0.02 74.327 21 97.625 2022 127.910 AC220 167.290 218.470 - 285.010 371.520 ay 483.970 630.170 2, 348.800 8,730.000 120,393.000 165,976.000 120.2 Exhibit 1-C Present Value of S1 to Be Received at the End of a Given Number of Time Periods 3% 7% @.971 @.935 Period 1 2 3 2 4 5 - 65 7 - 8 9 10 12 1% 0.990 0.986 0.971 0.961 9.90 0.951 24 0.942 2:24 .933 2:22 0.923 24 0.914 2013 0.995 0.896 0.887 0.879 0.87 @.861 0.85 0.844 0.836 0.828 2:06 0.820 @.780 0.742 0.672 0.608 2% 0.98 0.961 @.942 0.924 0.929 0.906 9.00 A. RAS .871 0.012 0.853 6.837 .820 .804 0.788 @.773 . 0.758 @.743 - @.728 @.714 .700 .686 0.673 @.610 @.552 @.453 @.372 4% 2.962 0.925 0.889 0.85 0.855 .822 0.022 .790 @.760 10 0:13 0.731 .703 0.102 @.676 0.650 12 0.625 @.601 .577 0.555 0.534 0.513 @.494 .475 @.456 0.375 @.308 .208 @.141 0.943 0.915 0.888 2.888 0.863 0.003 0.837 2:02 0.813 9.022 0.789 02 0.766 0.100 0.744 9:14 9:22 0.722 0.701 21 0.681 9:00 0.661 0.642 . 0.623 - 0.605 0.587 0.570 12 0.554 0.478 0.412 2. 307 0.228 5% 0.952 0.907 0.864 0.823 0.025 0.784 0704 .746 2.1 0.71 12 0.677 DOM .645 2024 0.614 1024 0.585 10 0.557 2010 0.530 0.595 @.481 @.458 0.43 0.410 0.396 0.377 0.295 0.231 0.142 0.087 6% @.943 0.890 0.84 @.792 VE .747 0.705 re 0.665 002 .627 2:04 0.597 @.558 .527 0.497 AREA 0.460 0.442 0.417 0.394 0.371 2 0.350 @.331 @.312 0.233 @.174 @.097 @.054 8% @.926 0.857 0.794 .735 9:/ 0.681 0.001 0.630 0.020 .583 0:30, 0.540 .500 VADOS @.463 . @.429 2012 .397 - .368 .340 @.315 . 292 @.270 ro 0.250 @.232 .215 .146 0.099 2.046 @.021 0.873 0.816 0.763 0.763 0.713 0.713 0.000 0.666 0.022 0.623 0.582 0:302 0.544 0.508 0.475 0.444 0.415 22 0.388 0.362 0.339 @.317 0.296 en @.277 0.258 0.184 0.131 0.067 0.034 9% 2.917 0.842 2.772 0.708 0.700 0.650 0.039 .596 9.229 .547 24 0.502 2014 0.466 Wave 0.422 VA 0.388 12 0.356 0.32 0.299 0.275 0.252 12 0.231 0.212 . 0.194 0.178 0.116 @.075 0.032 0.013 10% 0.909 0.826 0.751 6.683 0.003 0.621 9:04 A. 564 2012 A.513 VE 0.467 UN 6.424 VA .386 vo @.350 .319 --- 0.290 0.263 @.239 0.218 . .198 0.180 0.164 @.149 .092 @.057 @.022 @.009 11% 0.901 0.812 0.731 0.659 8.639 0.593 9:39 0.535 232 0.482 0.702 0.434 12 0.391 0:32 @.352 1.332 0.317 224 0.286 0.258 0.232 222 0.209 CO2 0.188 100 0.170 0.153 22 0.138 0.124 0.074 0.044 0.015 0.005 10 * 14 12% @.893 6.797 0.712 .636 0.636 .567 0:30 0.507 9:307 2.452 0.134 6.404 watot 0.361 9:30 @.322 9.322 @.287 9:20 @.257 142 @.229 16 .205 @.183 @.163 @.146 . @.130 0.116 .184 .059 0.033 @.011 0.003 19 10 20 25 30 4e se 25% Period 1 2 3 3 4 4 5 6 7 16% 2.862 6.743 @.641 0.552 2.800 0.640 0.512 2.410 o 2 10 10 11 1 12 13 13% 0.885 0.783 0.693 0.613 0.540 0.545 0.48 0.480 0.425 0.23 6.376 0.376 0.333 01332 0.295 Die22 6.261 9:02 A.231 VIE . 284 .181 VA 6.160 AJU @.141 9:23 0.125 AC .111 12 @.098 @.087 0.047 @.026 0.008 0.002 14% 0.877 0.769 0.675 0.592 A.519 0.519 0.456 0.936 0.400 0.400 0.351 9:33 0.300 0.300 0.270 Ero e.237 23 e. 208 Vio 0.182 W204 0.160 0.140 0.123 e. 108 @.095 1 0.083 @.073 0.038 0.020 0.005 0.001 15% 0.870 0.756 0.658 0.572 A.497 0.497 42 0.432 0.376 0.376 0.327 8.327 0.284 0:26 0.247 0.247 0.215 VE12 e.187 10 0.163 10 0.141 1:12 0.123 0.107 AU 0.093 022 0.081 S. 0.070 0.061 0.030 0.015 0.004 0.001 17% 0.855 0.731 0.624 0.534 2.456 0.456 0.300 0.390 0.333 0.399 0.25 9:202 A243 0:42 A. PAR 2200 e. 178 Duo e. 152 132 0.130 12 0.11 42222 0.095 02 0.081 0.069 e.059 0.051 0.043 0.020 0.009 0.002 0.476 0.476 0.410 0.010 .354 0.354 @ 305 0.303 0.263 0.202 @.227 9:42 @.195 9:12 6.168 0.100 . 145 9.142 . 125 . 108 ve @.093 @.080 @.069 .060 0.051 @.024 @.012 @.003 0.001 18% @.847 0.718 0.699 0.515 0.515 437 0.997 0.370 0.370 0.314 9.219 0.266 V.200 0.225 9:22 A. 191 22 0.162 9:20 0.137 9:12 0.116 V.22 0.099 0.084 - 0.071 0.06 0.051 0.04 0.037 .016 0.007 0.001 19% @.840 0.706 0.593 0.499 0.419 0.419 0.353 0.952 06 0.296 6.249 9:21 0.209 0:20 .176 Vidro .148 V.170 .124 0.104 100 @.088 Vio 0.074 0.00 @.062 0.002 0.052 0.022 0.044 @.@37 0.031 0.013 0.005 0.001 20% 0.833 0.694 0.579 0.482 0.402 0.402 0.335 0.355 0.270 0:279 @.233 0:23 0.194 0.17 0.162 104 0.135 0.132 0.112 0112 0.093 9.092 0.078 0.070 0.065 @.054 @.045 @.038 0.031 0.026 0.010 0.004 0.001 @ pa 0.320 0.262 0.262 0.210 0.210 . 160 100 . 134 9:23 A. 107 101 0.086 000 0.069 00 @.055 VA 0.044 0.035 12 0.028 AVE 0.023 Ace 0.018 .014 0.012 0.004 @.001 30% 0.769 0.592 @.455 0.350 0.269 0.269 A.202 0.2017 159 0:13 123 Vaka A.294 202 0.073 Viure 0.056 0:03 0.943 one 0.033 0.02 VA 0.020 Viva 0.01 AVA 0.012 VAS .009 0.007 @.00 @.001 35% @.741 0.549 0.406 0.301 .223 0.225 165 0.163 . 122 0.122 0.091 0.09 0.067 0.007 @.es 0.030 0.037 0.037 0.027 DU 0.020 Sauce 0.015 VA 0.011 12 0.008 0.006 vy 0.005 0.003 0.002 @.001 40% 0.714 0.510 2.364 0.260 A.186 0.186 A.133 0132 0.095 0.09 0.068 0.008 0.048 0.048 0.035 0.039 0.025 0.022 0.018 0.010 0.013 0.009 AVE 0.006 9.000 0.005 2002 0.003 0.002 .002 0.001 50% 0.667 0.444 0.296 0.198 A. 198 13 0.154 Agg 0.000 A.5g 0.03 AR V202 0.026 VE 0.017 02 0.012 0.01 0.008 0.000 0.00 .00 Wave .002 9.00 0.002 0.002 0.001 0.001 14 15 10 17 19 20 25 30 40 56 3

Question

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Ruby is 25 and has a good job at a biotechnology company. She currently has $8,600 in an IRA, an important part of her retirement nest egg. She believes her IRA will grow at an annual rate of 8 percent, and she plans to leave it untouched until she retires at age 65. Ruby estimates that she will need $875,000 in her total retirement nest egg by the time she is 65 in order to have retirement income of $20,000 a year (she expects that Social Security will pay her an additional $15,000 a year). Using Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D, answer the following questions. a. How much will Ruby's IRA be worth when she needs to start withdrawing money from it when she retires? (Round discount factor to 3 decimal places and final answer to the nearest whole dollar.) Worth of IRA b. How much money will she have to accumulate in her company's 401(k) plan over the next 40 years in order to reach her retirement income goal? (Round discount factor to 3 decimal places and final answer to the nearest whole dollar.) Money to accumulate Exhibit 1-A Future Value (Compounded Sum) of S1 after a Given Number of Time Periods 2% Period 1 2 3 1.020 1.040 1.061 10% 1.100 1.210 1.331 1.46 4 5 1.982 6 7 8 9 19 19 11 4 12 13 14 15 16 17 18 19 -- 20 25 30 40 50 1% 1.010 1.020 1.030 1.041 2:04 1.051 2:02 1.062 2.00 1.472 2014 1.083 2002 1.094 1024 1.105 1.116 *** 1.127 1.138 1.149 1.161 4:20 1.173 1.184 1.196 1.208 Sado 1.220 1.282 1.348 1.489 200 1.645 1. 104 4:10 1.126 12 1.149 1.172 1.195 122 1.219 2012 1.243 1.268 m2 1.294 1.319 1.346 1.373 1.400 1.428 Since 1.457 1.486 1.641 1.811 2.208 2.692 3% 1.030 1.061 1.093 1.126 1.126 1.159 2:22 1. 194 3:12 1.230 SEO 1. 267 2:207 1.305 2 1. 344 1.384 1.426 1.469 1.513 1.558 1.605 1.653 1.702 * 1.754 1.806 2.094 2.427 3.262 4.384 4% 1.040 1.682 1.125 1. 179 17 1:21 1.217 1.265 3:30 1.316 5310 1.369 30% 1.423 1.480 1.539 1.601 1.665 1.732 . 1.801 1.873 1.948 2.26 co 2.107 2.191 2.666 3.243 4.801 7.107 5% 1.050 1.103 1.158 1.216 1.216 1.276 *are 1.340 30 1.407 B01 1.477 1.551 1.629 BRUGE 1.710 4 1.796 1.886 1.989 2.079 se 2.18 4:10 2.292 2.407 2.527 2.653 3.386 4.322 7.040 11.467 6% 1.060 1. 124 1.191 1.262 1.33 5.336 1.419 S. 1.504 20 1.594 4:39+ 1.689 OP 1.791 1.898 ** 2.012 2.133 2 2.261 2.397 22 2.540 2.693 2.854 3.026 3.207 4.292 5.743 10.286 18.420 7% 1.070 1.145 1.225 1.311 2.311 1.403 2.402 1.501 31201 1.606 Side 1.718 1.838 2100 1.967 4:24 2.105 112 2.252 12 2.410 2.579 12 2.759 S02 2.952 3.159 12 3.380 3.617 12 3.87 5.427 7.612 14.974 29.457 8% 1.080 1.166 1.260 1.360 1.360 1.469 2:10 1.587 201 1.714 S: 1.851 41022 1.999 2:22 2.159 113 2.332 E123 2.518 - 2.720 2.937 -- 3.172 are 3.426 3.700 3.996 4.316 4.661 6.848 10.063 21.725 46.902 9% 1.090 1.188 1.295 1.412 1.914 1.539 1.672 S. 1.828 SOCO 1.993 5.222 2.172 31172 2.367 120 2.580 - 2.813 3.066 3.342 3.642 3.970 4.328 4.717 5.142 1 5.604 8.623 13.268 31.409 74.358 1.611 2017 1.772 114 1.949 5:31 2.144 2.1** 2.358 41230 2.594 41229 2.853 1022 3.138 10 3.452 co 3.797 . 4.177 4.595 1 5.054 an 5.560 6.116 6.727 10.835 17.449 45.259 117.390 11% 1.110 1.232 1.368 1.518 1.518 1.685 2:002 1.870 5.070 2.076 5:01 2.305 21302 2.558 2:330 2.839 2.024 3.152 142 3.498 2014 3.883 4.310 4.785 40 5.311 . 5.895 6.544 2 7.263 8.062 13.585 22.892 65.001 184.57e 12% 14% 15% 17% 20% Period 1 19% 1.190 1.150 1.170 1.200 2 1.120 1.254 1.405 1.574 1.140 1.300 1.482 1.689 1.323 1.416 1.685 2 6 2 10 10 11 1 12 2 13 4 14 13% 1.130 1.277 1.443 1.630 1.680 1.843 1.842 2. ARS 2.082 2 253 2:353 2.658 2.050 3.004 S.00 3.395 3:32 3.836 3.030 4.335 23 4.898 5.535 6.254 . 7.067 7.986 1.709 9.024 2.0 10.197 11.523 21.231 39.116 132.780 450.740 1.262 1.762 1.074 1.979 2.211 2:211 2.476 21170 2.773 2.113 3.106 3.100 3.479 3.1979 3.896 3:02 4.363 7:30 4.887 7:00 5.474 2.141 6.130 9:12 6.866 9.000 7.690 101 8.613 9.646 17.000 29.960 93.051 289.000 1.521 1.249 1.749 2.011 2:011 2313 2.315 2.666 2.000 3.059 3.09 3.518 3.310 4.046 +1040 4.652 *.034 5.350 3330 6.153 122 7.076 12 8.137 22 9.358 10.761 wa 12.375 14.232 16.367 32.919 66.212 267.860 1,083.700 1.925 1.925 2105 2:19 2.50 2.902 2.853 2:03 3.252 3:124 3.707 sur 4.226 LEO 4.818 2010 5.492 an 6.261 7.138 8.137 2 9.276 - 10.575 12 12.056 13.743 26.462 50.950 188.880 700.230 16% 1.160 1.346 1.561 1.811 1.811 2.100 2.100 2.436 2.436 2.826 21626 3.228 3:27 3.803 3.003 4.411 12 5.117 3.11 5.936 3.230 6.886 Vio 7.988 11 9.266 2.600 10.748 10:40 12.468 14.463 16.777 2014 2.0 19.461 40.874 85.850 378.720 1,670.700 1.369 1.602 1.874 2192 2.192 2.565 21303 2. 201 2.00 3.511 3.311 4.108 1100 4.807 *1007 5.624 3:02 6.580 Vio 7.699 9.007 -100 10.539 12.33e 141339 14.42 14:22 16.879 19.748 23.10 50.658 111.070 533.870 2,566.200 18% 1.189 1.392 1.643 1.939 2.288 2.288 2.700 2.700 3.185 3.103 3.759 3:13 4.435 7.132 5.234 3:23 6.176 Wire 7.288 1200 8.599 D 10.147 10.147 11.974 12 14.129 12 16.672 10. 19.673 23.214 27.393 62.669 143.370 750.389 3,927.400 1.440 1.728 2.074 2.488 2.488 2.986 2.960 3.583 31303 4.300 5.160 3.100 6.192 0.174 7.430 1.1729 8.916 9.22 10.699 12.839 15.407 18.488 10.100 22.186 SELAM 26.623 AVE 31.948 38.338 95.396 237.380 1,469.800 9, 100.400 2.00 2.005 3 286 2:380 2.800 2.040 3.270 3:379 4.021 2:02 4.785 102 5.696 2.00 6.777 0 8.064 Di 9.596 2130 11.420 13.20 13.590 12:20 16.172 19,244 22.091 27.252 32.429 77.388 184.680 1,051.700 5,998.900 100 25% 1.250 1.563 1.953 2.441 3.05 3.052 3.815 3.615 4.768 1.700 5.960 3.700 7.451 1.31 9.313 9.312 11.642 11.044 14.552 14:22 18.190 10:12 22.737 28.422 ATE 35.527 BLUE 44.409 --- 55.511 --- 69.389 20 86.736 264.700 807.790 7,523.200 70,065.000 30% 1.300 1.690 2.197 2.856 3.213 3.713 4.822 4.827 6.276 0.276 8.157 0.137 10.604 10.00 13.786 12:00 17.922 17:22 23.298 23:290 30.288 wito 39.374 21 51.186 66.542 86.504 112.460 * 146.190 190.050 705.640 2,620.000 36,119.000 497,929.000 15 16 40 17 18 19 2e 25 30 46 50 Exhibit 1-B Future Value Compounded Sum) of $1 Paid In at the End of Each Period for a Given Number of Time Periods (an Annuity) Period 1 2 3 2 4 5 5% 1.000 2.050 6% 1.000 2.060 3.153 3.184 6 7 -- 8 10. 1% 1.000 2.010 3.030 4.860 1.000 5.101 3.101 6.152 9:12 7.214 SET 8.286 200 9.369 21:30 10.462 16 11.567 12.683 13.809 14.947 16.097 17.258 e 18.430 . 19.615 12 20.811 10:02 22.019 28.243 34.785 48.886 64.463 3% 1.000 2.30 3.691 4.189 4.184 5.309 3:30 6.468 9.00 7.662 S002 8.892 0.022 10. 159 22 11.464 12.90 12.888 14.000 14.192 1122 15.618 17.686 9 16 20 11 * 12 2% 1.000 2.020 3.060 4.122 5.204 3:20 6.308 9.00 7.434 124 8.583 2:02 9.755 21122 10.950 10:20 12.169 22:10 13.412 14.680 15.974 17.293 1. 18.639 1 20.012 21.412 22.841 24.297 32.30 40.588 60.402 84.579 4% 1.000 2.040 3.122 4.246 4:240 5.416 3.410 6.633 0.02 7.898 1.020 9.214 2.214 10.583 10:30 12.00 13.486 12.100 15.026 16.627 18.292 20.024 21.825 23.698 25.645 27.671 29.778 41.646 56.085 95.26 152.670 4.310 7310 5.526 21260 6.802 9.00 8. 142 9:24 9.549 2:37 11.027 1024 12.578 1270 14.207 15.917 ---- 17.713 19.599 200 21.579 23.657 25.840 28.132 30.539 33.066 47.727 66.439 120.800 209.350 7% 1.000 2.070 3.215 4.440 4.440 5.751 3:13 7.153 1122 8.654 0.034 19.260 10.200 11.978 400 13.816 12.00 15.784 17.888 20.141 22.550 25.129 14 27.888 30.840 33.999 12 37.379 40.999 63.249 94.461 199.640 406.530 4.375 +372 5.637 2:02 6.975 9:12 8.394 22+ 9.897 2.09% 11.491 24 13.181 12:10 14.972 12 16.870 18.882 21.015 23.276 25.673 28.213 30.906 33.760 end 36.786 54.865 79.058 154.760 290.340 8% 1.000 2.080 3.246 4.596 *.506 5.867 3.007 7.336 1230 8.923 0.222 10.637 12:48 12.488 14.487 14:07 16.645 10.042 18.977 10:24 21.495 14:22 24.215 27.152 142 30.324 *** 33.750 37.450 2014 41.446 45.762 73.106 113.280 259.060 573.770 9% 1.000 2.090 3. 278 4.573 4:373 5.985 9.202 7.523 --- 9.200 2:200 11.620 11.028 13.021 13.621 15.193 12:19 17.560 20.141 22.953 12 26.019 29.361 2014 33.003 36.974 41.301 46.018 51.160 84.701 136.310 337.890 815.080 10% 1.000 2.100 3.310 4.641 1.041 6. 105 92102 7.716 -4 9.482 AT 11.430 11.436 13.579 12:37 15.937 12:37 18.531 10:33 21.384 24.523 22 27.975 31.772 ---- 35.950 40.545 45.599 2012 51.159 57.275 98.347 164.490 442.590 1,163.900 11% 1.000 2.110 3.342 4.710 1.710 6.228 DLO 7.913 1.223 9.783 2.702 11.859 12:03 14.164 Set 16.722 10:24 19.561 22 22.713 --- 26.212 14 30.095 se 34.405 39.190 44.501 50.396 56.939 wiec 64.203 114.410 199.020 581.830 1,668.800 13 14 15 - 16 17 18 19 20 25 30 18.599 20.157 21.762 sere 23.414 25.117 42222 26.870 36.459 47.575 75.401 112.800 40 50 13% 17% Period 1 1.000 2 16% 1.000 2.160 3.506 5.066 1.000 2.170 3.539 9 6.827 2 5 2 11.12 o 12% 1.000 2.120 3.374 4.779 4.779 6.353 6.353 8. 115 8.115 10.089 22.300 14.776 14:10 17.549 1:32 20.655 0.022 24.133 ST122 28.029 S. 32.393 261322 37.280 SEBU 42.753 22 48.884 55.750 63,440 2 72.052 133.330 241.330 767.990 2,400.000 2.130 3.407 4.850 6.480 0.980 8.323 8.329 10.405 10.405 12.252 12:757 15.416 13:1910 18.420 10:20 21.814 21.019 25.650 13.030 29.985 34.883 40.417 46.672 0.09 53.739 61.725 70.749 80.947 155.620 293.200 1,013.700 3,459.500 10 11 12 13 14 15 16 17 18 19 20 25 30 40 50 14% 1.000 2.140 3.440 4.921 6.614 6.610 8.536 0.530 10.730 10.750 13.233 13:233 16.085 10.00 19.337 19:33 23.045 23.049 27.271 21 32.089 Jan 37.581 01002 43.842 10 50.980 201200 59, 118 68. 394 78.969 91.025 **** 181.870 356.790 1,342.000 4,994.500 15% 1.000 2.150 3.473 4.993 4.995 6.242 0.742 8.254 8.754 11.067 11.067 13.727 19.727 16.78 10.760 20.304 20:30 24.349 27:37 29.002 2.004 34,352 22 40.505 47.589 2013 55.717 32 02.00 65.075 75.836 P.030 88.212 102.440 212.790 434.750 1,779.100 7,217.700 8.77 11.414 14.240 14.00 17.519 17:31 21.321 12:24 25.733 30.850 36.786 43.672 1074 51.660 32 60.925 22 71.673 84.141 98.603 115.380 249.210 530.310 2,360.800 10,436.000 18% 1.000 2.180 3.572 5.215 3.215 7.154 1.154 9.440 9.442 12.142 12:142 15.327 15:327 19.086 12.000 23.521 23:32 28.255 20:32 34.931 22 42.219 LA 50.818 12 60.965 010 72.939 1622 0.000 87.068 103.740 123.410 way 146.630 342.600 790.950 4,163.210 21,813.000 5.141 7.14 7.014 9.207 9.202 11.772 12:17 14.773 14.173 18:20 18.285 22.393 221322 27.200 21:200 32.824 1024 39.404 2010 47. 103 14 56. 110 ay 66.649 10:04 78.979 RE 93.406 110.290 re 130.030 200 292.110 647.440 3,134.500 15,090.000 19% 1.000 2.190 3.606 5.291 5.291 7.297 1:297 9.683 9.689 12.523 12.523 15.902 19.923 19.923 24.701 *10 A. 404 NO.704 37.180 200 45.244 54.841 66.261 79.850 96.022 AVEC 115.270 12. 138.170 165.420 402.040 966.700 5,529.800 31,515.000 20% 1.000 2.200 3.640 5.368 5.368 7.442 7.442 9.90 9.950 12.016 12.916 16.499 10.499 20.799 40:19 25.959 23.33% 32. 15A 32.190 39.581 22:30 48.497 59. 196 72.035 87.442 105.930 02:20 128.120 die 154.740 186.690 471.980 1,181.900 7,343.900 45,497.000 30. 25% 1.000 2.250 3.813 5.766 8.282 8.207 11.259 11.259 15.07 19.072 19.842 19.642 25.802 23:00 33.253 33:49 42.566 +21300 54.208 rico 68.760 . 86.949 00:30 109.690 22.02 138.110 173.640 09 218.050 273.560 342.950 1,054.800 3,227.200 30,089.000 80,256.000 30% 1.000 2.300 3.990 6.187 9.043 9.043 12.730 17.583 17.583 23.85 23.856 32.015 34.013 42.619 E.022 56.405 0.02 74.327 21 97.625 2022 127.910 AC220 167.290 218.470 - 285.010 371.520 ay 483.970 630.170 2, 348.800 8,730.000 120,393.000 165,976.000 120.2 Exhibit 1-C Present Value of S1 to Be Received at the End of a Given Number of Time Periods 3% 7% @.971 @.935 Period 1 2 3 2 4 5 - 65 7 - 8 9 10 * 12 1% 0.990 0.986 0.971 0.961 9.90 0.951 24 0.942 2:24 .933 2:22 0.923 24 0.914 2013 0.995 0.896 0.887 0.879 0.87 @.861 0.85 0.844 0.836 0.828 2:06 0.820 @.780 0.742 0.672 0.608 2% 0.98 0.961 @.942 0.924 0.929 0.906 9.00 A. RAS .871 0.012 0.853 6.837 .820 .804 0.788 @.773 . 0.758 @.743 - @.728 @.714 .700 .686 0.673 @.610 @.552 @.453 @.372 4% 2.962 0.925 0.889 0.85 0.855 .822 0.022 .790 @.760 10 0:13 0.731 .703 0.102 @.676 0.650 12 0.625 @.601 .577 0.555 0.534 0.513 @.494 .475 @.456 0.375 @.308 .208 @.141 0.943 0.915 0.888 2.888 0.863 0.003 0.837 2:02 0.813 9.022 0.789 02 0.766 0.100 0.744 9:14 9:22 0.722 0.701 21 0.681 9:00 0.661 0.642 . 0.623 - 0.605 0.587 0.570 12 0.554 0.478 0.412 2. 307 0.228 5% 0.952 0.907 0.864 0.823 0.025 0.784 0704 .746 2.1 0.71 12 0.677 DOM .645 2024 0.614 1024 0.585 10 0.557 2010 0.530 0.595 @.481 @.458 0.43 0.410 0.396 0.377 0.295 0.231 0.142 0.087 6% @.943 0.890 0.84 @.792 VE .747 0.705 re 0.665 002 .627 2:04 0.597 @.558 .527 0.497 AREA 0.460 0.442 0.417 0.394 0.371 2 0.350 @.331 @.312 0.233 @.174 @.097 @.054 8% @.926 0.857 0.794 .735 9:/ 0.681 0.001 0.630 0.020 .583 0:30, 0.540 .500 VADOS @.463 . @.429 2012 .397 - .368 .340 @.315 . 292 @.270 ro 0.250 @.232 .215 .146 0.099 2.046 @.021 0.873 0.816 0.763 0.763 0.713 0.713 0.000 0.666 0.022 0.623 0.582 0:302 0.544 0.508 0.475 0.444 0.415 22 0.388 0.362 0.339 @.317 0.296 en @.277 0.258 0.184 0.131 0.067 0.034 9% 2.917 0.842 2.772 0.708 0.700 0.650 0.039 .596 9.229 .547 24 0.502 2014 0.466 Wave 0.422 VA 0.388 12 0.356 0.32 0.299 0.275 0.252 12 0.231 0.212 . 0.194 0.178 0.116 @.075 0.032 0.013 10% 0.909 0.826 0.751 6.683 0.003 0.621 9:04 A. 564 2012 A.513 VE 0.467 UN 6.424 VA .386 vo @.350 .319 --- 0.290 0.263 @.239 0.218 . .198 0.180 0.164 @.149 .092 @.057 @.022 @.009 11% 0.901 0.812 0.731 0.659 8.639 0.593 9:39 0.535 232 0.482 0.702 0.434 12 0.391 0:32 @.352 1.332 0.317 224 0.286 0.258 0.232 222 0.209 CO2 0.188 100 0.170 0.153 22 0.138 0.124 0.074 0.044 0.015 0.005 10 * 14 12% @.893 6.797 0.712 .636 0.636 .567 0:30 0.507 9:307 2.452 0.134 6.404 watot 0.361 9:30 @.322 9.322 @.287 9:20 @.257 142 @.229 16 .205 @.183 @.163 @.146 . @.130 0.116 .184 .059 0.033 @.011 0.003 19 10 20 25 30 4e se 25% Period 1 2 3 3 4 4 5 6 7 16% 2.862 6.743 @.641 0.552 2.800 0.640 0.512 2.410 o 2 10 10 11 1 12 13 13% 0.885 0.783 0.693 0.613 0.540 0.545 0.48 0.480 0.425 0.23 6.376 0.376 0.333 01332 0.295 Die22 6.261 9:02 A.231 VIE . 284 .181 VA 6.160 AJU @.141 9:23 0.125 AC .111 12 @.098 @.087 0.047 @.026 0.008 0.002 14% 0.877 0.769 0.675 0.592 A.519 0.519 0.456 0.936 0.400 0.400 0.351 9:33 0.300 0.300 0.270 Ero e.237 23 e. 208 Vio 0.182 W204 0.160 0.140 0.123 e. 108 @.095 1 0.083 @.073 0.038 0.020 0.005 0.001 15% 0.870 0.756 0.658 0.572 A.497 0.497 42 0.432 0.376 0.376 0.327 8.327 0.284 0:26 0.247 0.247 0.215 VE12 e.187 10 0.163 10 0.141 1:12 0.123 0.107 AU 0.093 022 0.081 S. 0.070 0.061 0.030 0.015 0.004 0.001 17% 0.855 0.731 0.624 0.534 2.456 0.456 0.300 0.390 0.333 0.399 0.25 9:202 A243 0:42 A. PAR 2200 e. 178 Duo e. 152 132 0.130 12 0.11 42222 0.095 02 0.081 0.069 e.059 0.051 0.043 0.020 0.009 0.002 0.476 0.476 0.410 0.010 .354 0.354 @ 305 0.303 0.263 0.202 @.227 9:42 @.195 9:12 6.168 0.100 . 145 9.142 . 125 . 108 ve @.093 @.080 @.069 .060 0.051 @.024 @.012 @.003 0.001 18% @.847 0.718 0.699 0.515 0.515 437 0.997 0.370 0.370 0.314 9.219 0.266 V.200 0.225 9:22 A. 191 22 0.162 9:20 0.137 9:12 0.116 V.22 0.099 0.084 - 0.071 0.06 0.051 0.04 0.037 .016 0.007 0.001 19% @.840 0.706 0.593 0.499 0.419 0.419 0.353 0.952 06 0.296 6.249 9:21 0.209 0:20 .176 Vidro .148 V.170 .124 0.104 100 @.088 Vio 0.074 0.00 @.062 0.002 0.052 0.022 0.044 @.@37 0.031 0.013 0.005 0.001 20% 0.833 0.694 0.579 0.482 0.402 0.402 0.335 0.355 0.270 0:279 @.233 0:23 0.194 0.17 0.162 104 0.135 0.132 0.112 0112 0.093 9.092 0.078 0.070 0.065 @.054 @.045 @.038 0.031 0.026 0.010 0.004 0.001 @ pa 0.320 0.262 0.262 0.210 0.210 . 160 100 . 134 9:23 A. 107 101 0.086 000 0.069 00 @.055 VA 0.044 0.035 12 0.028 AVE 0.023 Ace 0.018 .014 0.012 0.004 @.001 30% 0.769 0.592 @.455 0.350 0.269 0.269 A.202 0.2017 159 0:13 123 Vaka A.294 202 0.073 Viure 0.056 0:03 0.943 one 0.033 0.02 VA 0.020 Viva 0.01 AVA 0.012 VAS .009 0.007 @.00 @.001 35% @.741 0.549 0.406 0.301 .223 0.225 165 0.163 . 122 0.122 0.091 0.09 0.067 0.007 @.es 0.030 0.037 0.037 0.027 DU 0.020 Sauce 0.015 VA 0.011 12 0.008 0.006 vy 0.005 0.003 0.002 @.001 40% 0.714 0.510 2.364 0.260 A.186 0.186 A.133 0132 0.095 0.09 0.068 0.008 0.048 0.048 0.035 0.039 0.025 0.022 0.018 0.010 0.013 0.009 AVE 0.006 9.000 0.005 2002 0.003 0.002 .002 0.001 50% 0.667 0.444 0.296 0.198 A. 198 13 0.154 Agg 0.000 A.5g 0.03 AR V202 0.026 VE 0.017 02 0.012 0.01 0.008 0.000 0.00 .00 Wave .002 9.00 0.002 0.002 0.001 0.001 14 15 10 17 19 20 25 30 40 56 3