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PLEASE WRITE DOWN COMPOUND INTEREST FACTORS

7- You are planning to become a millionaire (i.e., save S1 M) over the next 30 years when you finally retire. a) Ifyou are earning interest at the rate of 5% and you live 15 years after retirement, what annual level of living expenses can you afford with your savings? b) Suppose your retirement living expenses will increase at an annual rate of 3% due to inflation. Determine the annual spending plan in line with your inflation

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Answer #1

Model- 1(an compound interest toobe Prs) Given infamatian Savings is $IpDo,oodo Time period is 3o years a) iven thai rate of 5% Then udnghe 5% intaert tabl 1,boo,000 A (10.380) A 96,339 1 tlence, the annual suppoting expense 6,339.11

Model-2 125 ngs EquivalenT annual vakie 1,000,000ニEquivalenl annual value (+0 05)15 {,000,000 Equivalent an n ual value 2 08 I 0 0502.0) Equivalent annual value 1,00,0 Equivalent annual value (to.38) - Equi valent annual vale0000 (0 38 6,339.1 tTotal savings Equivalen annued valu e 1, Do0,000 Equivalent annual value t-(1+0 03)(5151 0.0S-O 03 , ooo poo - Equivalent anptu volue -(i.5) (.46) O os-o 02

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