You are planning for a very early retirement. You would like to retire at age 40 and have enough Previous question to withdraw $235,000 per year for the next 30 years (based on family history, you think you will live to age 70). You plan to save 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 70 years old (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Read the requirements Requirement 1. How much money must you accumulate by retirement to make your plan work? (Hint: Find the present value of the $235,000 withdrawals.) (Round your final answer to the nearest whole dollar.) To make the plan work, you must accumulate this amount by retirement Requirement 2. How does this amount compare to the total amount you will withdraw from the investment during retirement? How can these numbers be so different? Over the course of your retirement you will be withdrawing However, by age 40 you only need to have invested These numbers are different because: OA. You need to havo far less accumulated than what you will withdraw because you only withdraw a portion of the investment every year-the balance remains invested where it continues to earn 12% interest. O B. You need to have far more accumulated than what you will withdraw because you will withdraw a large portion of the investment every year---the balance remains invested where it continues to earn 12% interest. OC. You need to have the same amount accumulated as vou will withdraw because vou will not earn further interest on vour investment when you Reference you are planning for a very early retirement sve by making 15 equal annual instalment Click the loon to view Present Value of Click the toon to view Future Value of Read the tourements Requirement 1. How much money must you To make the play work, you must accumula Requirement 2. How does this amount com Dver the course of your retirement you w However, by age 40 you only need to have These numbers are different because Present Value of 1 Periods 15 2% 3% 4% 5% ex 7% 8% 10% 123 14% 15% 16% 10% 20% Period 1 090 0.00097107209520430035 0.926 09170.00.00877 0.570 085208470.833 Period 2 0.00 0.00 0.9250SO70800.873 08570M20.000 0.797 0.700.756 0.7430.7180.6 Period 3 0.9 0.92 0.91588008640.840 0.16 0.794 0.772 0.7510712067506006410 6090.579 Period 4 0961 0.994.10.0823 072 0.78 0.736 070006800630 0.52 0.572056205160482 Periods 0.961 0.06 0.363 0.02078407470.7130681 0.6500610567 0.519 0497 0.47504570.402 Period 0.542 0.0337079007450705 0.6 0.6300.500.54 0.57 0.456 0.432 0.410 0.370 0.335 Period 7 0.939 0.87103130.760071106650623 0.5830.54 0.313 0.452 0.400 0.378 0.354 0.3140.279 Period 0.923 0.853 0.7890731 06770627 0.50 0.540 0.5204T04940-3510.327 0.305 0.2060239 Period 0.914 0.37 0.700.709 0.6450.500.544 0.500 0.400.40.361 0.00028402000225 0.194 Period 10 0.90 0.20 07440.678 0.614055805080463 0422 0.38 0.322 0270 0.247 0227 0.19 0.162 Period 110.00.00401220.650 0.585 0.527 0.47504290.300.350.200.23 0.21 0.19 0.100.155 Period 120.820.78807010.025 0.5570.4970.440.397 0.396 0.319 025702080.167 0.168 0.13 0.112 Period 13 0.870 0773 0.60105010500.400.415 03250200022901201000.145 0.116 0.093 Period 14 0.570 0.750 0.681 0577 0.506042 0.38 0.20 029 0280 0206 0.1600.141 0.125 0.09 0.078 Period 150.361 0740842 0.566 0.481 0417 0.362 0.315 027502390.100.1400.123 0.100.054 0.065 Period 16 055 0728 0.623 0.54 0.45 0.394 0.399 0282 0252 0218 0.10 0.123 0.10 0.000 0.071 0.054 Period 17 0.54 0.714 0505 05130438 0371 03170270 0231 0.19 0.146 0.1000.090 0.000 0.000 0.045 Period 18 0.005 0.7000547 049404160350290 025002120.1800.150000.001 0.000 0.05 0.038 Period 19 028 0.686 0.570 047 03460331 0277 0232 0.14 0.154 0.116 0.08 0.070 0.000 0.043 0.031 Period 20 0.20 0.673 0.554 0.456 0377 0312 02580215 0.178 0.19 0.104 0.073 0.0010.051 0.037 0.020 Period 21 08110.660 0.538 04300.350 0294 0242 0.19 0.164 0.13 0.09 0.054 0.053 0.014 0.031 0.022 Period 22 0.003 0.57 0.522 0.22 0.34202780226 0.184 0.15001230060 0056 0.046 0.00 0.028 0.098 Period 23 076 0.64 0.5070006 0.32 0.282 0211 0.170 0.18 0.112 0.074 0.04 0.040 0.000 0.002 0.015 Period 24 0788 062204900390 03100207197 0.158 0.125 0.1020066 043 0035 0.028 0.019 0.013 Period 25 0.780 0.610 0.4780375 0295 0.233 0.134 0146 0.116 0.002 0.00 0.00 0.030 0.024 0.098 0.010 A. You need to have for less accumular B. You need to have far more accumula C. You need to have the same amount OD. None of the above Print Done nu instaliments from apel Present Value of $1 table) Future Value of 1 table) history you think you will live to age 70). You plan to ompletely depleted when you are 70 years old money must you accum arest whole dollar) must accumulate this amoy is amount compare to the rament you will be with ly need to have invested Periods Period 1 Perled 2 Period Period 4 Period Period Period 7 Period Period Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 16 Period 17 Period 18 Period 19 Period 20 Period 21 Paried 22 Porled 23 Period 24 Period 25 Future Value of 51 15 2% 3% 4% 5% 6% 0% 9% 10% 12% 14% 13% 16101020 1030 1040 1050 1.000 1.070 1080 1.090 1.500 1.120.140 1.150 1020 104 105 1092 1.100 1.12411651.161.18812101254 1300 1.323 1030 1061 1093 1.125 1581.191 1228 1280 129513311406 14821521 1.041 1.062 1.125 1.17012161212 1311 1.35014121.45415741680 1.749 1.061 1.104 1.15912171276390 1400 146 15391611 1.7621925 2011 1.062 1.125 1.194 1265134014191501 1.58716771.772 1974 21952313 1072 1.149 12301316 1.407 1.50415061714 102819492211 2502 2.660 1083 1.17212671301477 1.501 1.7101851 1.9021442476 2.850 3.000 1.094 1.195 1305 1.4231551158910 1999 21722358277332523518 1.100 1.210 1.34414801629 1.7911.7 2.159 2.36725943100 3.7074046 1.116 1.243 1.3841.530 1.710 1.898 2.105 23322.500 285934794226 4652 1.127 1288 14281601 1.790 2012 2.252 2518 281331593.89848185.360 1.13812941.469 1685 1.86 21324102.720 3.05 3.4524.363 5.492 6.153 1.100 1.319 15131732 1.980 26 257 2.937 3.362 3.7 4.887 8 2017.07 1.1611.346 1.558 1801 2079 2.3972.750 3.172354241776414 7.138 8137 1.173 1.37 1.805.873 2.183 2.5402.9623425 3.97045056.13061379.350 1.18414001853 1948 2292 2.690 3.153.700 4.328 5.0646.069.278 10.75 1.19 142817022026 2407 2.54 3.380 3.99547175.5607.690 10.5 12:38 12081457 1.754 2107 2.527 3.026 3.617431651426.116.613 12.06 1423 1220 1.450 1.800 2.1912.653 3.207 3.870 4801 56046.727 9.648 13.74 1637 123215161860 2279 27M3400 4.1415.0046.100 7.400 10.00 15.0 18.82 1.245 1540 1996 2370 2.905 3.804 443054376.659 814012.10 17.86 2184 1.25715771.97424653,072 3.8204741 5.87172588.954 13.55 2036 2489 1270 1808 2.000 2.560322540405.0726.341 79119.850 15.18 23.21286 128216412094 2656333042925.4276.8488.623 1083 17.00 28.46 32.92 because acumulated than wh more accumulated than w same amount accumulate os to am 12% interest potinue to eam 12% interest - Reference you in you witive to age 70) You plato depleted when you are 70 years old. very early motramenty Jalannual instants www of w Future Value of $1 . much money must you ole ola you must accurate oes this amount compi our retirement you will you only need to have Terent because Present Value of Ordinary Annuity of $1 Periods 19 24 35 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.500 0.971 0.962 0.952 0943 0935 0.28 0.917 0.909089008710870 0562087 Period 2 1970 1942 1943 1886 1859 1833 180 1.7831.759 1736 1.8901647 1620 1.80515861528 Period 2941 284 2.829 2.775 2.723 2673 2004 2.577 2.531 2.487 2402232 2280 2246 2.174 2.106 Period 4 3902 3.808 3.717 3530 3.546 3.485 3.387 3312 324031702.03 2014 285627982590 2.589 Periods 48594.753 45804452 43294212 4.100 3.9933.890 371 260 3433 335232743.127 2 991 Period 6 5.795 5.601 5417 5242 5.07649174.7674.823 4.4864.355 4111 3.8893.784 3.6863498 3.328 Period 1 6.728 6.4726.230 6.002 5.786 5.5825380 5.206 5050 48684564 426 4160 4.0393.812 3.605 Period 78427325 7020 6.7396.433 6210 5.97157475538 5.33549184630487434440783837 Period 8.566 8. 1627.786 74357.10 6.806.5156247 5,996 5.79 53284946 4772 4.80 4300 4001 Period 10 9.471 8.963 8.530 8.1117.722 7.30 79246.710 6.416.145 5.850 5216 5010483344944152 Period 11 10.3689.7879.250 0.750 8.30 7.387 7497.139 6805 6.496 59 5450 523 5020 4666 4327 Period 12 1.285 10.5959.85493858.860 8.384 7.3 756 7.1616.814 6194 5.00 5.421 5.19 4.7904439 Period 13 12.134 1348 10.635 0.01 0.3948.8538.3587.904 74877.100648458425583554240104530 Period 14 13.00412.106 11.286 10 530.00 0.2057456.244 1.78673676.6206.002 5.724546SDON 4641 Period 15 201512401193811.118 10,390 9712 9.108.560.061760665116142T557550824575 Period 16 14.718 13.57812.561.652 10.838 10.106 8.4478.851 8.3137.60461462059545 5.1624730 Period 17 15.214.20213.160121681127410.4779.76 9.1228.5448.00271206373 6.047 5.7405.2224775 Period 18 16300 14.218754 12.690 1690 10.828 10.0509.372 8.756.2017.250 6.4676.125018274812 Period 19 17.220 15.678143413.1341208511.15810.339.6040208365736665506.1995.877531644 Period 20 18.046 16.361 14877 1359012052 11470105140.61801298.514 TA696.623 6.259 5.92963534870 Period 21 18.87 17.01115415 14.029 12821 1.75410,8%810.017 9.2528640 7.562 6.5876.31259735.3944891 Period 22 10.660 17.058 1593714.451 13.083 12.042 11.061 10.201044287727645 670 635 6.0115.410409 Period 23 20.45018292 16.44414857 13.42912300 11.272 10.371 9.5808.880 7710 6.792 6.3996.04 5.4324905 Period 24 212 1991418.30 15.247 13.799 12.550 11.400 10.5209.70789457.7846.6956460754514937 Period 25 22.0195231741315.622 14.094 12.7811656 10.875 9.23907778436.8736.484.0075.497 4948 12% interest eam 12.inders ve farlos accumulated we far more accumulate we the same amount ad bove Top 10 completely depleted when you are 70 years old anual instaments from age w Present Value of $1 table) Future Value of $1 table> uch money must you accumula arst while doit you must court this more amount compare to the ur retirement you will be with ou only need to have invested rent because Periods Period 1 Period 2 Period 3 Period 4 Periods Period Period Period Period Parfod 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 16 Period 17 Period 10 Period 19 Period 20 Period 21 Period 22 Period 23 Period 24 Period 25 Future Value of Ordinary Annuity of 51 18 26 35 4% 54 6% 75 8% 95 10% 12% 145 15% 1000 1000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2010 2020 2030 2040 2050 2060 2070 2000 2000 2100 2.1202.540 2.150 3.030 3050309131223.153.18432153246 3.278 3.30 3.3743.440 3:473 4.000 4.122 4.1844244310 | 4375 4.440 4505 4.573 4541 477949214993 5101 5.204530964165.5265.60 5.750 5.387 69856.105 6351 66106742 6.152 6.3086.468 6.631 6.806.9757,153 737 7523 7.7168.115 6.500 6.754 7.214 7.43476627893814283148.6548.3239.2009.487 10.09 10.73 11.07 8.2008.5808.892921495499.0DT 102001064110311.4412.30 13.23 13.73 9.369 9.755 10.16 10.5811.00 1149 11.12401302135814781609 1679 10.109511.461201 1258 18.181.82 14.40 15.1915.94 17.56 19.34 20.30 11.57 12.17 12.81 13:49 1421 549715781885 17.568.53 20.65 23.0424.35 12.50 13.40 14.9 1503 1592 16.87 17.91898 20.14 21.3824.13 272729.00 13.81 1458 15.82 1663 17.7118.88 20.14 21.50 229 2452 28.00 32.0934.35 14.95 15 97 17:00 1829 1960 21.0 22.55 2421200227903230375840.50 16.10 17.20 18.0 20.02 2158 23.28 25182715293531.77 37243.84 4758 17.20 18.4 20.48 2162 23 66 2567 27.80 30:32 33.00 3595 42.75 50.98 55.72 18.43 2001 21.7 23.70 284 2821304 33.7 38.97 40.544888591265.08 19.61 2141 2341 25.5 28 13 30.91 14.00 3745 41.30 45.00 55.7568.99 75.84 20.81 2284 25.12 2767 3054 33.76 37 38 41455 02 51.1663.478.978821 2202 2030 28.87 29.7833.07 36.79 41.00 45.7051.16 57.2572059102 1024 23 24 25 78 28.5 31.97 35.72 30.904497 502 50.8 54.0081.701048158.8 24.47 27 30 30 543425 38.51 43.39 49.01 5486287714092.5012041378 25.72 2885 32.45 3.624143470053.440.09 19.5 79.5410461382 1993 28.9730,234433908 44.50 50.82 581868 18.7988.50 1182158.71842 2824320036.48416547.73 54.5632573.198.351303 181.92128 Jos to earn 12 Inst pritinues to sam 12% were ve areas accumulated than wil ve far more accumulated than w ve the same amount acordate ove Print One ement to make your plan work? (Hint. Find the present value of the $235,000 withdrawals.) (Round your final answer to the nearest wholec Requirements 1. How much money must you accumulate by retirement to make your plan work? (Hint: Find the present value of the $235,000 withdrawals.) 2. How does this amount compare to the total amount you will withdraw from the investment during retirement? How can these numbers be so different? it continues to earn 129 Where it continues to ear Print Done