Tom Huston, a $25-$year$-$old college graduate, wishes to retire at age $65.$ To supplement other sources of retirement income, he can deposit $$2,000$

each year into a tax$-$deferred individual retirement arrangement $($IRA$).$ The IRA will earn a $10\%$ return over the next $40$ years.

a$.$ If Tom makes end$-$of$-$year $$2,000$ deposits into the IRA, how much will he have accumulated in $40$ years when he turns $65?$

b$.$ If Tom decides to wait until age $35$ to begin making end$-$of$-$year $$2,000$ deposits into the IRA, how much will he have accumulated when he

retires $30$ years later?

c$.$ Using your findings in parts a and b$,$ discuss the impact of delaying deposits into the IRA for $10$ years $($age $25$ to age $35)$ on the amount

accumulated by the end of Tom's sixty$-$fifth year.

d$.$ Rework parts $a,b,$ and c $,$ assuming that Tom makes all deposits at the beginning, rather than end, of each year. Discuss the effect of

beginning$-$of$-$year deposits on the future value accumulated by the end of Tom's sixty$-$fifth year.

Answers $($insert your answers in the highlighted cells; use cell references, equations, and functions wherever possible$)$

a$.$

Annual deposits

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Number of years

Future value

b$.$

Annual deposits

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Number of years

Future value

c$.$

d$.$

Annual deposits

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Number of years

Future value

Annual deposits

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Number of years

Future value