You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to draw $245,000 per year for the next 40 years (based on family history. you think you'll live to age 80). You plan to save for retirement by making 15 equal annual installments (from age 25 to age 40) into a fairly risky investment fund that you expect will eam 12% per year. You will leave the money in this fund until it is completely depleted when you are 80 years old. (Click the icon to view the present value annuity table.) (Click the icon to view the future value annuity table.) B (Click the icon to view the present value table.) (Click the icon to view the future value table.) Requirements Requirement 1. How much money must you accumulate by retirement? (Hint: Find the present value of the $245,000 withdrawals.) (Round your answer to the nearest whole dollar.) The present value is $ 2019725.287 Requirement 2. How does this amount compare the total amount you will draw out of the investment during retirement? How can these numbers be so different? Over the course of your retirement you will be withdrawing $ 9800000 . However, by age 40 you only need to have invested the present value. These numbers are different because: CA. You need to have far less accumulated than what you will withdraw because you only withdraw a portion of the investment every yearthe balance remains invested where it continues to earn 12% interest. OB. You need to have far more accumulated than what you will withdraw because you will withdraw a large portion of the investment every yearthe balance remains invested where it continues to eam 12% interest. OC. You need to have the same accumulated as you will withdraw because you will not earn further interest on your investment when you reach retirement. OD. None of the above, Requirement 3. How much must you pay into the investment each year for the first 15 years? (Hint: Your answer from Requirement 1 becomes the future value of this annuity.) (Round your answer to the nearest whole dollar.) You must pay $ into the investment each year for the first 15 years. You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to draw $245,000 per year for the next 40 years (based on family history, you think you'll live to age 80). You plan to save for retirement by making 15 equal annual installments (from age 25 to age 40) into a fairly risky investment fund that you expect will earn 12% per year. You will leave the money in this fund until it is completely depleted when you are 80 years old. - X - X Data Table Data Table dollar.) Periods 10% % Present Value of $1 12% 14% 0.893 0.877 16% Period 16% Present Value of Annuity of $1 10% 12% 14% 0.909 0.893 0.877 3.791 3.605 3.433 1 0.909 0.943 1 0.862 5 0.621 0.567 0.519 0.476 5 3.274 10 0.386 0.270 0.227 10 6.145 5.56 5.216 4.833 0.322 0.183 15 0.239 0.140 0.108 15 7.606 6.811 6.142 5.575 20 0.149 0.104 0.073 0.051 20 8.514 7.469 6.623 5.929 25 0.092 0.059 0.038 0.024 25 9.077 7.843 6.873 6.097 6.177 30 0.057 0.033 0.020 0.012 30 9.427 8.055 7.003 35 0.036 0.019 0.010 0.006 35 9.644 8.176 7.070 6.215 40 0.022 0.011 0.005 0.003 40 9.779 8.244 7.105 6.234 45 0.014 0.006 0.003 0.001 45 9.863 8.283 7.123 6.242 Print Done Print Done You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to draw $245,000 per year for the next 40 years (based on family history, you think you'll live to age 80). You plan to save for retirement by making 15 equal annual installments (from age 25 to age 40) into a fairly risky investment fund that you expect will earn 12% per year. You will leave the money in this fund until it is completely depleted when you are 80 years old. B (Click the icon to view the present value annuity table.) (Click the icon to view the future value annuity table.) B (Click the icon to view the present value table.) (Click the icon to view the future value table.) Requirements - X - X R Data Table Data Table Int br.) TH Future Value of $1 Period 16% Periods 10% 12% 14% 16% 1.000 1 1.100 1.120 1.140 1.160 1 5 Future Value of Annuity of $1 10% 12% 14% 1.000 1.000 1.000 6.105 6.353 6.610 15.937 17.549 19.337 31.772 37.280 43.842 57.275 72.052 91.025 6.877 5 1.611 1.762 1.925 2.100 10 21.321 10 2.594 3.106 3.707 4.411 15 4.177 15 5.474 7.138 9.266 51.660 115.38 20 20 6.728 9.646 13.743 19.461 25 98.347 133.33 25 181.87 249.21 10.835 17.000 26.462 40.874 30 164.49 241.33 356.79 530.31 30 17.449 29.960 50.950 85.850 271.02 431.66 693.57 35 1120.71 28.102 35 52.800 98.100 180.314 40 442.59 767.09 1342.00 40 45.259 93.051 188.884 378.721 2360.80 4965.27 45 718.90 2590,56 45 72.890 1358.23 163.988 363.679 795.444 Print Done Print Done End You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to draw $245,000 per year for the next 40 years (based on family history, you think you'll live to age 80). You plan to save for retirement by making 15 equal annual installments (from age 25 to age 40) into a fairly risky investment fund that you expect will eam 12% per year. You will leave the money in this fund until it is completely depleted when you are 80 years old. (Click the icon to view the present value annuity table.) Click the icon to view the future value annuity table.) (Click the icon to view the present value table.) (Click the icon to view the future value table.) Requirements CE Requirement 1. How much money must you accumulate by retirement? (Hint. Find the present value of the $245,000 withdrawals.) (Round your answer to the nearest whole dollar.) The present value is $. Requirements To make your plan work, answer the following: 1. How much money must you accumulate by retirement? (Hint: Find the present value of the $245,000 withdrawals. You may want to draw a time line showing the savings period and the retirement period.) 2. How does this amount compare the total amount you will draw out of the investment during retirement? How can these numbers be so different? 3. How much must you pay into the investment each year for the first 15 years? (Hint: Your answer from Requirement 1 becomes the future value of this annuity.) 4. How does the total out-of-pocket savings compare to the investment's value at the end of the 15-year savings period and the withdrawals you will make during retirement? Print Done Enter your answer in the answer box and then click Check