You are trying to decide how much to save for retirement. Assume you plan to save $ 8 000

per year with the first investment made 1 year from now. You think you can earn

8.0% per year on your investments and you plan to retire in

42 years immediately after making your last

$8000 investment.

a.How much will you have in your retirement account on the day youretire?

b. If, instead of investing

$8000 peryear, you wanted to make one lump sum investment today for yourretirement, how much would that lump sum need tobe?

c. If you hope to live for

18 years inretirement, how much can you withdraw every year in retirement(starting one year afterretirement) so that you will just exhaust your savings after

18 withdrawals(assume your savings will continue to earn

8.0% inretirement)?

d. If, instead, you decide to withdraw $487 000

per year in retirement(again with the first withdrawal one year afterretiring), how many years will it take until you exhaust yoursavings?

e.Assuming the most you can afford to save is

$1600 peryear, but you want to retire with $1 000 000

in your investmentaccount, how high of a return do you need to earn on yourinvestments?