You are planning for a very earty retirement. You would like to retire at age 40 and have enough money saved to be able to draw $206,000 per year for the next 40 years (based on family history you think you'll five to age 80). You plan to save for retirement by making 20 equal annual instaliments (from age 20 to age 40) into a fairly risky investment fund that you expect wil eam 10% 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) (cek the icon to view the present le table Ce the icon to view the future value table) To make your plan work answer the following questions: Click the icon to view sion) 1. How much money must you accumulate by retirement (Hint Find the present value of the $205,000 withdrawals) Calculate the premiere value to find out how much money mont be accumulated by retirement, (round your answer to the nearest whole dolar) The present value 2. How does this amount compare to the total amount you will driw out of the heart during tetement? How can these numbers be so ofteret? Over the course of your retirement you will be withdrawing However, by age to you only need to have invested These numbers are different because OA You need to have for more accumulated than what you will withdraw because you will withdraw a large portion of the investment every year--the balance remain invested where it continues to earn 10% interest OB. You need to have the same accumulated as you will withdraw because you will not eam further interest on your investment when you reach retirement OC. You need to have tar les accumulated than what you wil withdraw because you only withdraw a portion of the investment every year the balance remains invested where it continues to earn 10% interest OD. None of the above 3. How much must you pay into the investment each year for the first herty yours? (Met Your answer from Requirements becomes the future value of this aruty) (Round your answer to the nearest whole for For the first twenty years, the amount you must say into the investment ench your in 4. How does the total out-of-pocket savings compare to the investments value at the end of the 20-year savings period and the withdrawals you will make during retirement? (Use the investment round that you calculated above, then round your final answer to the nearest whole dollar) The total out-of-pocket savings amounts to This is for than the investment's worth at the end of twenty years and remarkably than the amount of money you will eventually withdraw from the investment. This is far than the investment's worth at the end of twenty years and remarkably than the amount of money you will eventually withdraw from the Investment Choose fro less Inter any number in the input fields and then continue to the next question more This is far than the amount of money you will eventually withdraw from the Investment than the investment's worth at the end of twenty years and remarkably Choose from any list or enter any number in the input fields and then continue to the 1. higher lower Reference 14% 0.877 1.647 2.322 2.914 3.433 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 Present Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 Period 2 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.690 Period 3 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 Period 5 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 Period 6 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 Period 7 6.728 6.472 6.230 6.002 5.786 5.5825.206 4.8684.564 Period 8 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 Period 9 8.566 8.162 7.786 7.435 7.108 6.8026.247 5.759 5.328 Period 10 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 Period 11 10.368 9.787 9.2538.760 8.306 7.887 7.139 6.495 5.938 Period 12 11.255 10.575 9.9549.385 8.863 8.384 7.536 6.8146.194 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 6.424 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 | 6.628 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.5147.469 Period 25 22.023 19.523 17.41315.622 14.094 12.783 10.675 9.077 | 7.843 3.889 4.288 4.639 4.946 5.216 3.685 4.039 4.344 4.607 4.833 3.498 3.812 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 5.453 5,660 5.842 6.002 6.142 5.029 5.197 5.342 5.468 5.575 4.656 4.793 4.910 5.008 5.092 4.327 4.439 4.533 4.611 4.675 6.623 6.873 5.929 6.097 5.353 5.467 4.870 4.948 X Reference Present Value of $1 10% 0.909 0.826 0.751 0.683 0.621 12% 0.893 0.797 0.712 0.636 0.567 14% 0.877 0.769 0.675 0.592 0.519 16% 0.862 0.743 0.641 0.552 0.476 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 Periods 1% Period 1 0.990 Period 2 0.980 Period 3 0.971 Period 4 0.961 Period 5 0.951 Period 6 0.942 Period 7 0.933 Period 8 0.923 Period 9 0.914 Period 100.905 Period 11 0.896 Period 120.887 Period 130.879 Period 140.870 Period 15 0.861 Period 200.820 Period 25 | 0.780 2% 3% 4% 5% 6% 8% 0.980 0.971 0.962 0.952 0.943 0.926 0.961 0.943 0.925 0.907 0.890 0.857 0.942 0.915 0.889 0.864 0.840 0.794 0.924 0.888 0.855 0.823 0.792 0.735 0.906 0.863 0.822 0.784 0.747 0.681 0.888 0.837 0.790 0.746 0.705 0.630 0.871 0.813 0.760 0.711 0.665 0.583 0.853 0.789 0.731 0.677 0.627 0.540 0.837 0.766 0.703 0.645 0.592 0.500 0.820 0.744 0.676 0.614 0.558 0.463 0.804 0.722 0.650 0.585 0.527 0.429 0.788 0.701 0.625 0.557 0.497 0.397 0.773 0.681 0.601 0.530 0.469 0.368 0.758 0.661 0.577 0.505 0.442 0.340 0.743 0.642 0.555 0.481 0.417 0.315 0.673 0.554 0.456 0.377 0.312 0.215 0.610 0.478 0.375 0.295 0.233 0.146 0.564 0.513 0.467 0.424 0.386 0.507 0.452 0.404 0.361 0.322 0.456 0.400 0.351 0.308 0.270 0.410 0.354 0.305 0.263 0.227 0.370 0.314 0.266 0.225 0.191 0.335 0.279 0.233 0.194 0.162 0.350 0.319 0.290 0.263 0.239 0.287 0.257 0.229 0.205 0.183 0.237 0.208 0.182 0.160 0.140 0.195 0.168 0.145 0.125 0.108 0.162 0.137 0.116 0.099 0.084 0.135 0.112 0.093 0.078 0.065 0.149 0.092 0.104 0.059 0.073 0.038 0.051 0.024 0.037 0.016 0.026 0.010 X Reference 2% 1.020 1.040 1.061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 20% 1.200 1.440 1.728 2.074 2.488 Periods 1% Period 1 1.010 Period 2 1.020 Period 3 1.030 Period 4 1.041 Period 5 1.051 Period 6 1.062 Period 7 1.072 Period 8 1.083 Period 9 1.094 Period 10 1.105 Period 11 1.116 Period 12 1.127 Period 13 1.138 Period 14 1.149 Period 15 1.161 Period 20 1.220 Period 25 1.282 1.126 1.149 1.172 1.195 1.219 1.265 1.316 1.369 1.423 1.480 Future Value of $1 5% 6% 8% 1.050 1.060 1.080 1.103 1.124 1.166 1.158 1.191 1.260 1.216 1.262 1.360 1.276 1.338 1.469 1.340 1.419 1.587 1.407 1.504 1.714 1.477 1.594 1.851 1.551 1.689 1.999 1.629 1.791 2.159 1.710 1.898 2.332 1.796 2.012 2.518 1.886 2.133 2.720 1.980 2.261 2.937 2.079 2.397 3.172 2.653 3.207 4.661 3.386 4.292 6.848 1.194 1.230 1.267 1.305 1.344 1.384 1.426 1.469 1.513 1.558 10% 12% 14% 16% 18% 1.100 1.120 1.140 1.160 1.180 1.210 1.254 1.300 1.346 1.392 1.331 1.405 1.482 1.561 1.643 1.464 1.574 1.689 1.811 1.939 1.611 1.762 1.925 2.100 2.288 1.772 1.974 2.195 2.436 2.700 1.949 2.211 2.502 2.826 3.185 2.144 2.476 2.853 3.278 3.759 2.358 2.773 3.252 3.803 4.435 2.594 3.106 3.707 4.411 5.234 2.853 3.479 4.226 5.117 6.176 3.138 3.896 4.818 5.936 7.288 3.452 4.363 5.492 6.886 8.599 3.797 4.887 6.261 7.988 10.147 4.177 5.474 7.138 9.266 11.974 6.727 9.646 13.743 19.461 27.393 10.835 17.000 26.462 40.874 | 62.669 2.986 3.583 4.300 5.160 6.192 1.243 1.268 1.294 1.319 1.346 1.539 1.601 1.665 1.732 1.801 7.430 8.916 10.699 12.839 15.407 1.486 1.641 1.806 2.094 2.191 2.666 38.338 95.396 18% 1.000 2.180 3.572 5.215 7.154 20% 1.000 2.200 3.640 5.368 7.442 5.101 Periods Period 1 Period 2 Period 3 Period 4 Periods Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 16% 1.000 2.160 3.506 5.066 6.877 8.977 11.414 14.240 17.519 21.321 Future Value of Annuity of $1 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2.010 2.020 2.030 2.040 2.050 2.060 2.080 2.100 2.120 2.140 3.030 3.060 3.091 3.122 3.153 3.184 3.246 3.310 3.374 3.440 4.060 4.122 4.184 4.246 4.310 4.375 4.506 4.641 4.779 4.921 5.204 5.309 5.416 5.526 5.637 5.867 6.105 6.353 6.610 6.152 6.308 6.468 6.633 6.802 6.975 7.336 7.716 8.115 8.536 7.214 7.434 7.662 7.898 8.142 8.394 8.923 9.487 10.089 10.730 8.286 8.583 8.892 9.214 9.549 9.897 10.637 11.436 12.300 13.233 9.369 9.755 10.159 10.583 11.027 11.491 12.488 13.579 14.776 16.085 10.462 10.950 11.464 12.006 12.578 13.181 14.487 15.937 17.549 19.337 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 23.045 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 27 271 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24.523 28.029 32.089 14.947 15.974 17.086 18.292 19.599 21.015 24.215 27.975 32.393 37.581 16.097 17.293 18.599 20.024 21.579 23.276 27.152 31.772 37.280 43.842 22.019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72.052 91.025 28.243 32.030 36.459 41.646 47.727 54.865 73.106 98.347 133.334 181.871 9.442 12.142 15.327 19.086 23.521 9.930 12.916 16.499 20.799 25.959 32.150 39.581 48.497 59.196 72.035 25.733 30.850 36.786 43.672 51.660 28.755 34.931 42.219 50.818 60.965 Period 20 Period 25 115.380 249.214 146.628 342.603 186.688 471.981 You are planning for a very earty retirement. You would like to retire at age 40 and have enough money saved to be able to draw $206,000 per year for the next 40 years (based on family history you think you'll five to age 80). You plan to save for retirement by making 20 equal annual instaliments (from age 20 to age 40) into a fairly risky investment fund that you expect wil eam 10% 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) (cek the icon to view the present le table Ce the icon to view the future value table) To make your plan work answer the following questions: Click the icon to view sion) 1. How much money must you accumulate by retirement (Hint Find the present value of the $205,000 withdrawals) Calculate the premiere value to find out how much money mont be accumulated by retirement, (round your answer to the nearest whole dolar) The present value 2. How does this amount compare to the total amount you will driw out of the heart during tetement? How can these numbers be so ofteret? Over the course of your retirement you will be withdrawing However, by age to you only need to have invested These numbers are different because OA You need to have for more accumulated than what you will withdraw because you will withdraw a large portion of the investment every year--the balance remain invested where it continues to earn 10% interest OB. You need to have the same accumulated as you will withdraw because you will not eam further interest on your investment when you reach retirement OC. You need to have tar les accumulated than what you wil withdraw because you only withdraw a portion of the investment every year the balance remains invested where it continues to earn 10% interest OD. None of the above 3. How much must you pay into the investment each year for the first herty yours? (Met Your answer from Requirements becomes the future value of this aruty) (Round your answer to the nearest whole for For the first twenty years, the amount you must say into the investment ench your in 4. How does the total out-of-pocket savings compare to the investments value at the end of the 20-year savings period and the withdrawals you will make during retirement? (Use the investment round that you calculated above, then round your final answer to the nearest whole dollar) The total out-of-pocket savings amounts to This is for than the investment's worth at the end of twenty years and remarkably than the amount of money you will eventually withdraw from the investment. This is far than the investment's worth at the end of twenty years and remarkably than the amount of money you will eventually withdraw from the Investment Choose fro less Inter any number in the input fields and then continue to the next question more This is far than the amount of money you will eventually withdraw from the Investment than the investment's worth at the end of twenty years and remarkably Choose from any list or enter any number in the input fields and then continue to the 1. higher lower Reference 14% 0.877 1.647 2.322 2.914 3.433 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 Present Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 Period 2 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.690 Period 3 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 Period 5 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 Period 6 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 Period 7 6.728 6.472 6.230 6.002 5.786 5.5825.206 4.8684.564 Period 8 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 Period 9 8.566 8.162 7.786 7.435 7.108 6.8026.247 5.759 5.328 Period 10 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 Period 11 10.368 9.787 9.2538.760 8.306 7.887 7.139 6.495 5.938 Period 12 11.255 10.575 9.9549.385 8.863 8.384 7.536 6.8146.194 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 6.424 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 | 6.628 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.5147.469 Period 25 22.023 19.523 17.41315.622 14.094 12.783 10.675 9.077 | 7.843 3.889 4.288 4.639 4.946 5.216 3.685 4.039 4.344 4.607 4.833 3.498 3.812 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 5.453 5,660 5.842 6.002 6.142 5.029 5.197 5.342 5.468 5.575 4.656 4.793 4.910 5.008 5.092 4.327 4.439 4.533 4.611 4.675 6.623 6.873 5.929 6.097 5.353 5.467 4.870 4.948 X Reference Present Value of $1 10% 0.909 0.826 0.751 0.683 0.621 12% 0.893 0.797 0.712 0.636 0.567 14% 0.877 0.769 0.675 0.592 0.519 16% 0.862 0.743 0.641 0.552 0.476 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 Periods 1% Period 1 0.990 Period 2 0.980 Period 3 0.971 Period 4 0.961 Period 5 0.951 Period 6 0.942 Period 7 0.933 Period 8 0.923 Period 9 0.914 Period 100.905 Period 11 0.896 Period 120.887 Period 130.879 Period 140.870 Period 15 0.861 Period 200.820 Period 25 | 0.780 2% 3% 4% 5% 6% 8% 0.980 0.971 0.962 0.952 0.943 0.926 0.961 0.943 0.925 0.907 0.890 0.857 0.942 0.915 0.889 0.864 0.840 0.794 0.924 0.888 0.855 0.823 0.792 0.735 0.906 0.863 0.822 0.784 0.747 0.681 0.888 0.837 0.790 0.746 0.705 0.630 0.871 0.813 0.760 0.711 0.665 0.583 0.853 0.789 0.731 0.677 0.627 0.540 0.837 0.766 0.703 0.645 0.592 0.500 0.820 0.744 0.676 0.614 0.558 0.463 0.804 0.722 0.650 0.585 0.527 0.429 0.788 0.701 0.625 0.557 0.497 0.397 0.773 0.681 0.601 0.530 0.469 0.368 0.758 0.661 0.577 0.505 0.442 0.340 0.743 0.642 0.555 0.481 0.417 0.315 0.673 0.554 0.456 0.377 0.312 0.215 0.610 0.478 0.375 0.295 0.233 0.146 0.564 0.513 0.467 0.424 0.386 0.507 0.452 0.404 0.361 0.322 0.456 0.400 0.351 0.308 0.270 0.410 0.354 0.305 0.263 0.227 0.370 0.314 0.266 0.225 0.191 0.335 0.279 0.233 0.194 0.162 0.350 0.319 0.290 0.263 0.239 0.287 0.257 0.229 0.205 0.183 0.237 0.208 0.182 0.160 0.140 0.195 0.168 0.145 0.125 0.108 0.162 0.137 0.116 0.099 0.084 0.135 0.112 0.093 0.078 0.065 0.149 0.092 0.104 0.059 0.073 0.038 0.051 0.024 0.037 0.016 0.026 0.010 X Reference 2% 1.020 1.040 1.061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 20% 1.200 1.440 1.728 2.074 2.488 Periods 1% Period 1 1.010 Period 2 1.020 Period 3 1.030 Period 4 1.041 Period 5 1.051 Period 6 1.062 Period 7 1.072 Period 8 1.083 Period 9 1.094 Period 10 1.105 Period 11 1.116 Period 12 1.127 Period 13 1.138 Period 14 1.149 Period 15 1.161 Period 20 1.220 Period 25 1.282 1.126 1.149 1.172 1.195 1.219 1.265 1.316 1.369 1.423 1.480 Future Value of $1 5% 6% 8% 1.050 1.060 1.080 1.103 1.124 1.166 1.158 1.191 1.260 1.216 1.262 1.360 1.276 1.338 1.469 1.340 1.419 1.587 1.407 1.504 1.714 1.477 1.594 1.851 1.551 1.689 1.999 1.629 1.791 2.159 1.710 1.898 2.332 1.796 2.012 2.518 1.886 2.133 2.720 1.980 2.261 2.937 2.079 2.397 3.172 2.653 3.207 4.661 3.386 4.292 6.848 1.194 1.230 1.267 1.305 1.344 1.384 1.426 1.469 1.513 1.558 10% 12% 14% 16% 18% 1.100 1.120 1.140 1.160 1.180 1.210 1.254 1.300 1.346 1.392 1.331 1.405 1.482 1.561 1.643 1.464 1.574 1.689 1.811 1.939 1.611 1.762 1.925 2.100 2.288 1.772 1.974 2.195 2.436 2.700 1.949 2.211 2.502 2.826 3.185 2.144 2.476 2.853 3.278 3.759 2.358 2.773 3.252 3.803 4.435 2.594 3.106 3.707 4.411 5.234 2.853 3.479 4.226 5.117 6.176 3.138 3.896 4.818 5.936 7.288 3.452 4.363 5.492 6.886 8.599 3.797 4.887 6.261 7.988 10.147 4.177 5.474 7.138 9.266 11.974 6.727 9.646 13.743 19.461 27.393 10.835 17.000 26.462 40.874 | 62.669 2.986 3.583 4.300 5.160 6.192 1.243 1.268 1.294 1.319 1.346 1.539 1.601 1.665 1.732 1.801 7.430 8.916 10.699 12.839 15.407 1.486 1.641 1.806 2.094 2.191 2.666 38.338 95.396 18% 1.000 2.180 3.572 5.215 7.154 20% 1.000 2.200 3.640 5.368 7.442 5.101 Periods Period 1 Period 2 Period 3 Period 4 Periods Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 16% 1.000 2.160 3.506 5.066 6.877 8.977 11.414 14.240 17.519 21.321 Future Value of Annuity of $1 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2.010 2.020 2.030 2.040 2.050 2.060 2.080 2.100 2.120 2.140 3.030 3.060 3.091 3.122 3.153 3.184 3.246 3.310 3.374 3.440 4.060 4.122 4.184 4.246 4.310 4.375 4.506 4.641 4.779 4.921 5.204 5.309 5.416 5.526 5.637 5.867 6.105 6.353 6.610 6.152 6.308 6.468 6.633 6.802 6.975 7.336 7.716 8.115 8.536 7.214 7.434 7.662 7.898 8.142 8.394 8.923 9.487 10.089 10.730 8.286 8.583 8.892 9.214 9.549 9.897 10.637 11.436 12.300 13.233 9.369 9.755 10.159 10.583 11.027 11.491 12.488 13.579 14.776 16.085 10.462 10.950 11.464 12.006 12.578 13.181 14.487 15.937 17.549 19.337 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 23.045 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 27 271 13.809 14.680 15.618 16.627 17.713 18.882 21.495 24.523 28.029 32.089 14.947 15.974 17.086 18.292 19.599 21.015 24.215 27.975 32.393 37.581 16.097 17.293 18.599 20.024 21.579 23.276 27.152 31.772 37.280 43.842 22.019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72.052 91.025 28.243 32.030 36.459 41.646 47.727 54.865 73.106 98.347 133.334 181.871 9.442 12.142 15.327 19.086 23.521 9.930 12.916 16.499 20.799 25.959 32.150 39.581 48.497 59.196 72.035 25.733 30.850 36.786 43.672 51.660 28.755 34.931 42.219 50.818 60.965 Period 20 Period 25 115.380 249.214 146.628 342.603 186.688 471.981