Two twin brothers have jobs and want to save for retirement. Bill starts at 25 and goes until he is 70. He puts in $1000 each quarter into an account that pays 9% compounded quarterly. Jim does not start until 40 and so he catches up puts in $2000 each quarter until he is 70.

 

a. Calculate how much each brother has when they retire.
b. Did Jim catch up?
c. How much did each make in interest?
d. What would be your advice to someone saving for retirement?

e. Pick one of the brother's and see how much they can withdraw from their account each quarter if they get the same rate and plan to live until 90.