Suppose that Kyoko is 45 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 $20,000 per year and will invest that amount in the stock market, where it is expected to yield an average annual return of 12.00% 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.

Kyoko would like to calculate how much money she will have at ages 60 and 65.

N=? I/Y=? PV=0 PMT=? FV=?

------------------------------------------------------------------------------------------------------------

Kyoko 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.

N=? I/Y=? PV= Amount saved for retirement by age 60 PMT=? FV=0

--------------------------------------------------------------------------------------------------------------------

Kyoko 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.

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

N=? I/Y=? PV= Amount saved for retirement by age 65 PMT=? FV=0