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Mini-Case where he has worked on him. He 2000 in addition his lump sum bonu and owns mutual fune 60, has just retired from hi
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Answer #1

Please follow the steps sequentially. Answers are highlighted in yellow colored cells. Adjacent cells contain excel formula

Retirement Funds        220,000 Excel formula
Savings annual rate 5%
Monthly rate    0.0041667 '=P215/12
Term (years)                  35
Number of periods                420 '=12*P217
Part (1) Amount he can withdraw on monthly basis             1,110 '=PMT(P216,P218,-P214,0,0)
Monthly pension             1,700
Total monthly income             2,810 '=P219+P221
Monthly expenses             3,700
Part (2)
Since monthly income < monthly expenses
The amount determined in part (1)
is insufficient.
Monthly income required             2,000 '=P223-P221
How long his retirement savings will last? (Months after retirement) 147.45 '=NPER(P216,P229,-P214,0,0)
How long his retirement savings will last? (Years after retirement) 12.29 '=P230/12
If he reduces monthly expenditure to 3200
Monthly income required             1,500 '=P233-P221
How long his retirement savings will last? (Months after retirement) 227.14 '=NPER(P216,P234,-P214,0,0)
How long his retirement savings will last? (Years after retirement) 18.93 '=P235/12
Part (3)
Yes he should wait till he turns 65 to obtain his
statement pension.
No, even if he waits till 70, the state pension amount
will not solve the problem. The shortfall is
3700 - 2,810 = 890 > the monthly pension amount
Part (4)
Inflation 3%
How old he will be 83.45 '=60+NPER(P246,0,-1,2,0)
Cost of newspaper 3.52 '=1.25*(1+P246)^35
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