Question

Information: 1. Don is 35 years old, married, lives in Missouri, and intends to retire at age 67. 2. Don and Rachel's total household AGI is $65,000. 3. Assume they invest in their 401(k) accounts. Assume an annual return of 8.00 percent on investments Questions: 5) If they need $1.50 million at retirement, they will need to save how much per month (tax-deferred product)? 6) If they need $2.00 million at retirement, they will need to save how much per month (tax-deferred product)? 7). If they save $2,000 per month, they will accumulate how much at retirement (tax-deferred product)? 8) If they save $3,500 per month, they will accumulate how much at retirement (tax-deferred product)?

Answer 1

Given,

Years to retire = 67 - 35 = 32 years

Annual return = 8%

Solution :-

Monthly return to - 8% - 0.66666666% c) 0,0066666666 72 No. of months to retire (n) = 32 years x 12 months = 384 Future Value (FO)=$1.50 million or $ 1500000 دراما let monthly payment be m' 384 - 0.0066666666 FV = [1 +8 -1] 1500000 - Mala / 024 0.066666666)-1] 1500000 MAREC (1.00666666)_13 1500000 X 0,006666666 = M[R.876385 -1] 38 9999.9999 = M/11.876385]

9999.9999 11.82 6385 & 845.57 - M So, they will need to each month. save $845.57 Future value (FU)= $2.00 million er $2000000 رحمامA Let monthly payment be 'M' FV- ^ [1+r) –.) 384 16+0.0066666666) - 2000000 = M 0.00 6666 66 384 - 2000000 x0.0066666666 = M 1/1.0066666666) 13333.3332 = M [ 12.826385-1] 13333. 3332 - M (11.876385] 13333.3332 - M 11.82 6385

$1122.42 - M So, per they will need to save $1127.42 month. Monthly payment (M) = $2000 Future Value - M ( +23h -1] - Pesce card ( + 0.006 389 665 0066 2000 0.00 66666666 3* 384 2000 0.00 66666666 11.0066666666) - 2ooo 0,00 66666666 206 26385 - 6 [12.826385 -1 ] 2000 0.0066666666 x 21.876385 - $3547915.54 So, they will accumulate $3547915.54 at retirement.

8 monthly payment (M) = $3500 Future Value - MTQ +o)" -] 3soo 0.0066666666 384 (1 + 0.0066666666) -1 - 35oo 0.0066666666 3500 11.0066666666) -1] 3500 (12.826385 -1] 0.0066666666 3500 0.0066666666 X 11.826385 $6208852.19 So, they will accumulate $6208852.19