fin3331 022802 tvm socsec amort

# fin3331 022802 tvm socsec amort - Fin3331.0228a (1) Assume...

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Fin3331.0228a (1) Assume that you will retire at age 65 and that you will live to age 80. You wish to provide supplemental retirement income of 18,000 per year before taxes for your retirement. Assume that you are 22 years old. How much must you set aside per year for your retirement, assuming that you can earn 17 percent on your money? Part 1: Lump sum needed at retirement. N=80 – 65 =15, PMT = 18,000, FV=0, i = 17. CPT PV= – 95,835.37 Part 2: FV= 95,835.37, i= 17, PV=0, n=65 – 22 = 43, CPT PMT= – 19.07. How much would you have to contribute, assuming that you could earn 6 percent on your investments? Part 1: Lump sum needed at retirement. N=80 – 65 =15, PMT = 18,000, FV=0, i = 6. CPT PV= – 174,820.48 Part 2: FV= 174,820.48, i= 6, PV=0, n=65 – 22 = 43, CPT PMT= – 932.33. Note: Your maximum Social Security benefit is 18,000 per year. Your annual contribution, assuming that you earn 30,000 per year is 6 percent of 30, 000, or 1,800. Your employer also makes a 6 percent contribution on your behalf, or 1,800. The combined

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## This note was uploaded on 02/22/2011 for the course FIN 3331 taught by Professor Nowacki during the Spring '09 term at Troy.

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fin3331 022802 tvm socsec amort - Fin3331.0228a (1) Assume...

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