Three Retirement Plans

Huey, Dewey, and Louie are triplets. They are 25 years old and are trying to set up savings plans for themselves. They plan to retire at age 65. They each have different ideas. All APRs are 4.4%.

Hueys plan: Plans to start now and deposit $100 each month into the account and leave the money in the bank until he retires at age 65.

Deweys plan: Plans to start now but Dewey doesnt want to be bothered with monthly payments like Huey. He wants to hang onto his money throughout the year, and then make just one payment at the end of each year. Hell deposit $1200 per year in his bank. He figures that at retirement his Nest Egg will be the same size as Hueys because each year, hes deposited just as much.

Louies plan: Louies a party guy! He wants to have fun with his money while hes young! He decides hell put off saving until hes 45, at which time hell start putting in twice as much per month as Huey ($200). He figures with this plan, his Nest Egg ought to be the same size as Hueys when they retire at age 65. (Twice as much for the time ought to be the same, right?)

1. (10 pts) Hueys Retirement Plan
   1. Determine the number of years Huey will be saving for his retirement.

1. How much money will Huey personally deposit into his retirement account? Show your calculation.

1. Find Hueys account balance when he retires at age 65.

N = FV =

I% = P/Y =

PV = C/Y =

PMT = PMT: END BEGIN

1. How much interest will Hueys account earn? Show your work.

1. (10 pts) Deweys Retirement Plan
   1. Determine the number of years Dewey will be saving for his retirement.

1. How much money will Dewey personally deposit into his retirement account? Show your calculation.

1. Find Deweys account balance when he retires at age 65.

N = FV =

I% = P/Y =

PV = C/Y =

PMT = PMT: END BEGIN

1. How much interest will Deweys account earn? Show your work.

1. (10 pts) Louies Retirement Plan
   1. Determine the number of years Louie will be saving for his retirement.

1. How much money will Louie personally deposit into his retirement account? Show your calculation.

1. Find Louies account balance when he retires at age 65.

N = FV =

I% = P/Y =

PV = C/Y =

PMT = PMT: END BEGIN

1. How much interest will Louies account earn? Show your work.

1. (2 pts) Did all 3 brothers make the same Total Deposits? _______________

If not, which brother deposited the most? _______________

1. (2 pts) Did all 3 brothers earn the same amount of interest? _______________

If not, which brother earned the most interest? _______________

1. (5 pts) Dewey would like to have the same amount of money as Huey when he retires. How much would Deweys annual deposit have to be for him to end up with as much money as Huey?

N = FV =

I% = P/Y =

PV = C/Y =

PMT = PMT: END BEGIN

1. (5 pts) Louie would also like to have the same amount of money as Huey when he retires. How much would Louies monthly deposit have to be for him to end up with as much money as Huey?

N = FV =

I% = P/Y =

PV = C/Y =

PMT = PMT: END BEGIN

1. (6 pts) What are the advantages/disadvantages of each brothers savings plan? Answers should be written in complete sentences with proper grammar and punctuation.

Huey:

• Advantage(s):

• Disadvantage(s):

Dewey:

• Advantage(s):

• Disadvantage(s):

Louie:

• Advantage(s):

• Disadvantage(s):