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.

10.

What will Davids annual need be at age 60?

Select one:

a.

$70,316

b.

$79,369

c.

$48,000

d.

$72,791

11.

How much capital will David need at age 60? (What is his Number)

Select one:

a.

$911,685

b.

$946,931

c.

$1,111,685

d.

$1,211,685

e.

$1,311,685

12.

How much will David have at age 60?

Select one:

a.

$760,031

b.

$770,031

c.

$780,031

d.

$790,031

e.

$800,031

13.

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