Funding a retirement goal

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Reference no: EM132020470

Financial Planning

Chris Jones wishes to have $200,000 in a retirement fund 30 years from now. He can create the retirement fund by making a single lump-sum deposit today. Use next table to solve the following problems.

If he can earn 12 percent on his investments, how much must Chris deposit today to create the retirement fund? Round PV-factor to three decimal places. Round your answer to the nearest cent.

Calculate your answer based on the PV-factor.

$ ______________

Calculate your answer based on the financial calculator.

$ ______________

If he can earn only 10 percent on his investments? Round PV-factor to three decimal places. Round your answer to the nearest cent.

Calculate your answer based on the PV-factor.

$ _______________

Calculate your answer based on the financial calculator.

$ ________________

If, upon retirement in 30 years, Chris plans to invest the $200,000 in a fund that earns 10 percent, what is the maximum annual withdrawal he can make over the following 25 years? Round the answer to the nearest cent. Round PVA-factor to three decimal places.

Calculate your answer based on the PVA-factor.

$ __________________

Calculate your answer based on the financial calculator.

$ __________________

How much would Chris need to have on deposit at retirement to annually withdraw $30,000 over the 25 years if the retirement fund earns 10 percent? Round the answer to the nearest cent. Round PVA-factor to three decimal places.

Calculate your answer based on the PVA-factor.

$ __________________

Calculate your answer based on the financial calculator.

$ ___________________

To achieve his annual withdrawal goal of $30,000 calculated in part c, how much more than the amount calculated in part a must Chris deposit today in an investment earning 10 percent annual interest? Round PVA-factor to three decimal places. Round your answer to the nearest cent. If an amount is zero, enter "0".

$ ___________________

Reference no: EM132020470

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