You plan to retire in 37 years and can invest to earn 8.5 percent. You estimate that you will need $102,000 at the end of each year for an estimated 16 years after retirement, and you expect to earn 6.5 percent during those retirement years. How much do you need to set aside at the end of each year to accumulate the money necessary for your retirement? (Assume year-end cash flows.)

I will need this much at retirement _____________and will need to set aside ___________per year (at the end of each year.

Using the no growth perpetuity formula, assume that you can receive $19,000 per year forever and that your cost of money is 8%. What is this opportunity worth today?

The opportunity is worth _______________.

Using the constant growth perpetuity formula, assume that you will receive $19,000 at the end of the first year this cash flow will grow 4% annually forever after that. With a cost of money of 9 percent, what is this opportunity worth today?

The opportunity is worth _______________.