You are 25 years old and currently earn $100,000 per year. Your wage replacement ratio (WRR) is determined to be 80%. You expect inflation will average 3% for your entire life expectancy. You expect to earn 8% on your investments and retire at age 62, living possibly to age 95. Your Social Security benefit statement indicates your Social Security retirement benefit in today's dollar adjusted for early retirement is $40,000 per year. You will make retirement savings contribution at the end of each month. Use Excel to calculate Jane's rerirement planning options under the (a) the Pure Annuity Model, (b) the Capital Preservation Mode and (c) the Purchasing Power Preservation Model

You are 25 years old and currently earn $100,000 per year. Your wage replacement ratio (WRR) is determined to be 80%. You expect inflation will average 3% for your entire life expectancy. You expect to earn 8% on your investments and retire at age 62, living possibly to age 95. Your Social Security benefit statement indicates your Social Security retirement benefit in today's dollar adjusted for early retirement is $40,000 per year. You will make retirement savings contribution at the end of each month. Use Excel to calculate Jane's rerirement planning options under the (a) the Pure Annuity Model, (b) the Capital Preservation Mode and (c) the Purchasing Power Preservation Model

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 44P

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Assume that you are 30 years old today, and that you are planning on retirement at age 65. Your current salary is $45,000 and you expect your salary to increase at a rate of 5% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be made on your 31st birthday and will be 8% of this year's salary. Likewise, you expect to deposit 8% of your salary each year until you reach age 65. Assume that the rate of interest is 7%, what is the present value of your retirement savings? please answer fast i give upvote
ou decide to replace your income of $70,000 a year in retirement for 30 years. How much do you need in your retirement account the day you retire to make that happen, assuming a real interest rate of 3%?
Assume that you are 30 years old today, and that you are planning on retirement at age 65. Your current salary is $45,000 and you expect your salary to increase at a rate of 5% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be made on your 31st birthday and will be 8% of this year's salary. Likewise, you expect to deposit 8% of your salary each year until you reach age 65. Assume that the rate of interest is 7%. The future value at retirement (age 65) of your savings is:
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