1)
Commentary on the cartoon: The older worker (Boomer) did not plan
well for retirement, and has to work to supplement his retirement
check. The Social Security system spends money taken from
current workers to pay the benefits of today's retirees. That
explains the younger worker's (Generation X) response to the older
worker. Money is taken from his paycheck to fund the older worker's
social security check.
In the near future, there will not be enough people working to pay
all retirees at today's rate. The Social Security system will go
bankrupt. Social Security's options are to increase the money taken
from the workers paychecks or decrease the amount of money paid to
retirees. Neither option is popular. An alternative is to establish
your own retirement fund. We can use the formulas that we worked
with in this Module to analyze different retirement
plans.
Your Retirement: Plan 1 - Starting Early ( Please try to
answer all the questions if possible)
a) Enter your desired amount of money you wish to receive
each month while retired = $ 2000 ( This is my
answer)
DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED
INCORRECT
b) Upon retirement (40 years from now) you want to receive
"x dollars" (amount of money you choose in Part a) each month for a
period of 28 years. This money resides in an account that pays 5.7%
interest. How much money must be in the account to fulfill your
goal?
Amount of money needed = $.
DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT. Round
your answer to 2 decimal places as needed.
c) You plan to deposit money every month for 40 years into
an account that pays 6.1%. What monthly deposit must you make to
achieve the amount of money determined in the answer to Part b
above?
Payment amount = $.
DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT. Round
your answer to 2 decimal places as needed.
d) How much money did you actually deposit into the
account?
Total amount deposited = $.
DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT. Round
your answer to 2 decimal places as needed.
e) How much money will you actually receive in payments
during retirement?
Total amount received = $.
DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT. Round
your answer to 2 decimal places as needed.
Your Retirement: Plan 2 - Waiting Until Middle
Agef) You wait until later to start saving for
retirement, and so are depositing money every month for only 20
years into an the same account that still pays 6.1%. What monthly
deposit must you make to achieve the amount of money determined in
the answer to Part b above?
Payment amount = $.
DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT. Round
your answer to 2 decimal places as needed.
g) How much money did you actually deposit in this
plan?
Total amount deposited = $.
DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT. Round
your answer to 2 decimal places as needed.
h) How many times more costly is the monthly payment of
Plan 2 (saving for 20 years) compared to Plan 1 (saving for 40
years)?
(Hint: Divide Part f by Part c).
How many times more costly 20 year plan is compared to 40
year plan = .
DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT. Round
your answer to 2 decimal places as needed.
As per rules I am answering the first 4 subparts of the question
b: 335,379.75
Using financial calculator
Input: PMT=2000, N=28*12=336, I/Y=5.7/12
Solve for PV as -335,379.75
c: 163.89
Using financial calculator
Input: FV= 335379.75, N=40*12=480, I/Y=6.1/12
Solve for PMT as -163.89
D: 78667.20
Total amount deposited = $163.89*480 =$78,667.20
E: 672000
Total amount received= 2000* 336= 672000
1) Commentary on the cartoon: The older worker (Boomer) did not plan well for retirement, and...
1) Commentary on the cartoon: The older worker (Boomer) did not plan well for retirement, and has to work to supplement his retirement check. The Social Security system spends money taken from current workers to pay the benefits of today's retirees. That explains the younger worker's (Generation X) response to the older worker. Money is taken from his paycheck to fund the older worker's social security check. In the near future, there will not be enough people working to pay...
Please show work thank you 1) Commentary on the cartoon: The older worker (Boomer) did not plan well for retirement, and has to work to supplement his retirement check. The Social Security system spends money taken from current workers to pay the benefits of today's retirees. That explains the younger worker's (Generation X) response to the older worker. Money older worker's social security check. taken from his paycheck to fund the In the near rure, there will or be enough...
Hello there, I am struggling with this problem, and I need someone to go over it and check if my answers are all correct please. I wasn't able to answer the last question for I couldn't figure it out. Thank you! 1) Commentary on the cartoon: The older worker (Boomer) did not plan well for retirement, and has to work to supplement his retirement check. The Social Security system spends money taken from current workers to pay the benefits of...
2) Find a vehicle that you would like to own on the internet. a) Paste a picture or screen shot in the box below using the "mountain" button to add the picture. The picture should include the following: i) Picture of the vehicle. ii) Sale price of the vehicle. b) Sale price of the car = $ DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT c) If the dealership you are buying the car from is offering 5.5%...
2) Find a vehicle that you would like to own on the internet. a) Paste a picture or screen shot in the box below using the "mountain" button to add the picture. The picture should include the following: i) Picture of the vehicle. ii) Sale price of the vehicle. Please note ( this is not simple interest) b) Sale price of the car = $ DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT c) If the dealership you...
2) Find a vehicle that you would like to own on the internet. a) Paste a picture or screen shot in the box below using the "mountain" button to add the picture. The picture should include the following: i) Picture of the vehicle. ii) Sale price of the vehicle. b) Sale price of the car = $ DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT c) If the dealership you are buying the car from is offering 5.5%...
Can someone check my answers please? Thank you! 3) Find a vacation home that you would like to own on the internet. a) Paste a picture or screen shot in the box below using the "mountain" button to add the picture. The picture should include the following: i) Picture of the vacation home. ii) Sale price of the vacation home. b) Sale price of the vacation home = $ 25000000 DO NOT TYPE COMMAS OR ANSWERS WILL BE MARKED INCORRECT...
Hello there, I need help with this question. I have answered all the question except the last 2. Can someone go over my problem and check my work and answer the last 2 please?! 2) Find a vehicle that you would like to own on the internet. a) Paste a picture or screen shot in the box below using the "mountain" button to add the picture. The picture should include the following: i) Picture of the vehicle. ii) Sale price...
Troy is saving for his retirement 22 years from now by setting up a savings plan. He has set up a savings plan wherein he will deposit $ 127.00 at the end of each month for the next 11 years. Interest is 7 % compounded monthly. (a) How much money will be in his account on the date of his retirement? (b) How much will Troy contribute? (c) How much will be interest? (a) The future value will...
Pat has a Keogh retirement plan (this type of plan is tax-deferred until money is withdrawn). If deposits of $10,000 are made each year into an account paying 8% compounded annually, how much will be in the account after 23 years? What will be the total amount of interest earned? The amount in the account after 2 years is $ (round to the nearest cent, as needed). The amount of interest earned is s (round to the nearest cent, as...