Suppose that Crystal is 40 years old and has no retirement savings. She wants to begin saving for retirement, with the first payment coming one year from now. She can save $30,000 per year and will invest that amount in the stock market, where it is expected to yield an average annual return of 10.00% return. Assume that this rate will be constant for the rest of hers life. In short, this scenario fits all the criteria of an ordinary annuity.

Crystal would like to calculate how much money she will have at age 60.

Use the following table to indicate which values you should enter on your financial calculator. For example, if you are using the value of 1 for N, use the selection list above N in the table to select that value.

Input	________	________	0	______
Keystroke	N	I/Y	PV	PMT	FV
Output					?

Using a financial calculator yields a future value of this ordinary annuity to be approximately ________ at age 60.

Crystal would now like to calculate how much money she will have at age 65.

Use the following table to indicate which values you should enter on your financial calculator. For example, if you are using the value of 1 for N, use the selection list above N in the table to select that value.

Input	_______	________	0	_______
Keystroke	N	I/Y	PV	PMT	FV
Output					?

Using a financial calculator yields a future value of this ordinary annuity to be approximately at age 65.

Crystal expects to live for another 30 years if she retires at age 60, with the same expected percent return on investments in the stock market.

She would like to calculate how much she can withdraw at the end of each year after retirement.

Use the following table to indicate which values you should enter on your financial calculator in order to solve for PMT in this scenario. For example, if you are using the value of 1 for N, use the selection list above N in the table to select that value.

Input	____	_____	Amount saved for retirement by age 60		0
Keystroke	N	I/Y	PV	PMT	FV
Output				?

Using a financial calculator, you can calculate that Crystal can withdraw ______- at the end of each year after retirement (assuming retirement at age 60), assuming a fixed withdrawal each year and $0 remaining at the end of her life.

Crystal expects to live for another 25 years if she retires at age 65, with the same expected percent return on investments in the stock market.

Use the following table to indicate which values you should enter on your financial calculator. For example, if you are using the value of 1 for N, use the selection list above N in the table to select that value.

Input	____	____-	Amount saved for retirement by age 65		0
Keystroke	N	I/Y	PV	PMT	FV
Output				?

Using a financial calculator, you can calculate that Crystal can withdraw _______ at the end of each year after retirement at age 65, assuming a fixed withdrawal each year and $0 remaining at the end of her life.

Step 3: Practice: Future Value of an Annuity

Now its time for you to practice what youve learned.

Suppose that Crystal is 40 years old and has no retirement savings. She wants to begin saving for retirement, with the first payment coming one year from now. She can save $8,000 per year and will invest that amount in the stock market, where it is expected to yield an average annual return of 4.00% return. Assume that this rate will be constant for the rest of hers life.

Crystal would like to calculate how much money she will have at age 60.

Using a financial calculator yields a future value of this ordinary annuity to be approximately ______ at age 60.

Crystal would now like to calculate how much money she will have at age 65.

Using a financial calculator yields a future value of this ordinary annuity to be approximately ____ at age 65.

Crystal expects to live for another 30 years if she retires at age 60, with the same expected percent return on investments in the stock market.

Using a financial calculator, you can calculate that Crystal can withdraw _____ at the end of each year after retirement (assuming retirement at age 60), assuming a fixed withdrawal each year and $0 remaining at the end of her life.

Crystal expects to live for another 25 years if she retires at age 65, with the same expected percent return on investments in the stock market.

Using a financial calculator, you can calculate that Crystal can withdraw _____ at the end of each year after retirement at age 65, assuming a fixed withdrawal each year and $0 remaining at the end of her life.