Use the following information to answer questions 10-13: David, age 45, wants to retire at age 60. He currently makes $60,000 per year and does not expect any pay increases but expects to receive a cost-of -living increase equal to inflation. He has an objective to replace 80% of his pre-retirement income. He wants the retirement income to be inflation adjusted. His portfolio is currently valued at $150,000 and earning 10% per year. David expects inflation to average 3% and expects to live until age 90. He saves 7% of his gross income at each year-end and expects to continue this level of savings. David wants to ignore Social Security.

What will Davids annual need be at age 60? Select one: a. $70,316 b. $79,369 c. $48,000 d. $72,791 e. $74,782

How much would David need to increase his savings on a MONTHLY basis to meet his goal of retiring at age 60?

Select one:

a.

$7,820

b.

$450

c.

$8,020

d.

$8,120

e.

$8,220