You are now 50 years old and plan to retire at age 67. You currently have a share portfolio worth $150 000, a superannuation plan worth $250 000, and a money market account worth $50 000. Your share portfolio is expected to provide you annual returns of 12 per cent, your superannuation investment will earn you 9.5 per cent annually, and the money market account earns 6.25 per cent, compounded monthly

. A. If you do not save another cent, what will be the total value of your investments when you retire at age 67?

B. Assume that your superannuation contribution is $12 000 per year for the next 17 years (starting 1 year from now). How much will your investments be worth when you retire at 67?

C. Assume that you expect to live another 23 years after you retire (until age 90). At age 67, you now take all of your investments and place them in an account that pays 8 per cent (use the scenario from part b in which you continue saving). If you start withdrawing funds starting at age 68, how much can you withdraw every year (e.g., an ordinary annuity) and leave nothing in your account after a 23th and final withdrawal at age 90?

D. At age 67, you want your investments, which are described in the problem statement, to support a perpetuity that starts a year from now. How much can you withdraw each year without touching your principal (at 8 per cent per year)?

E. How do an ordinary annuity, an annuity due and a perpetuity differ?