Question
Using the TVM Calculator please answer the following: Calculating Retirement: Abby, age 27, realizes she needs $1,500,000 to retire on (in additionto her company's pension
Using the TVM Calculator please answer the following:
- Calculating Retirement:
Abby, age 27, realizes she needs $1,500,000 to retire on (in additionto her company's pension and social securitybenefits). She thinks she can earn a 10% return.She wishes to retire at the age of 65. How much should she start putting into a monthly savings plan? (a) $ . If Abby started saving the same amount per month 5 years earlier, at age (b) _______, she would have earned (c) $__________.
So, beginning to save 5 years earlier would have earned Abby how much more money in retirement? (d) $ .
[Show all work/process for full credit]
A)PV | B)PV | ||
PMT | PMT | ||
FV | FV | ||
RATE | RATE | ||
PERIOD | PERIOD | ||
COMPOUNDING | COMPOUNDING | ||
C)PV | D)PV | ||
PMT | PMT | ||
FV | FV | ||
RATE | RATE | ||
PERIOD | PERIOD | ||
COMPOUNDING | COMPOUNDING |
- College Savings:
Todays cost for a good college education (4 years) including room, food and books runs approximately $147,000. If you have two kids, ages 2 and 4, how much will college be, assuming 3% inflation in (a) 16 years for the 2-year-old? $ __________ and in (b) 14 years for the 4-year-old? $_______.
If you can earn 12% on what you are saving, how much should you save each month for the 2-year-old? (c) $_________ for the 4-year-old?
(d) $ .
[Show all work/process for full credit]
PV | PV | ||
PMT | PMT | ||
FV | FV | ||
RATE | RATE | ||
PERIOD | PERIOD | ||
COMPOUNDING | COMPOUNDING | ||
PV | PV | ||
PMT | PMT | ||
FV | FV | ||
RATE | RATE | ||
PERIOD | PERIOD | ||
COMPOUNDING | COMPOUNDING |
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