$8.$ Assuming that Perry wants enough income for $25$ years of retirement and the rate of inflation will remain at $4\mathrm{.}0\%$ per year, how much will Perry and Anita need to live on for the $25$ years? $($Hint: Use $$170,000$ for your payment variable.$).$ PLease answer in excel and show formulas.

Perry Edwards is $25$ years old. He and his wife Anita have two children, Shane and Lisa, ages $1$ and $3$ respectively. Perry wants to retire in $40$ years and refurbish old cars. He would like a nice retirement home with some land on a peaceful lake in the mountains of Pennsylvania. Perry believes that to purchase a home and lot in $40$ years would cost $$200,000$ in today$$s prices. In forty years Perry also believes he and his wife can live comfortably on $$35,000$ a year in today's dollar terms.

Realizing that retirement is only $40$ years away, and that he still had two children to raise and put through college, Perry thought he had better start saving for his retirement dreams. Also, Lisa is only $15$ years away from college, and before Lisa finishes, Shane will be ready for school in $17$ years. Currently Perry has $$5,000$ in an emergency money market account earning $4\mathrm{.}0\%$ interest compounded daily. His desire is to never have to use those emergency funds and that they will become a part of his estate. He also owns his own home that has a market value of $$100,000$ and a mortgage of $$90,000.$ The $8\mathrm{.}0\%$ mortgage has $28$ years remaining and his monthly payments are $$672$ for principal and interest alone.

Perry$$s annual salary is $$40,000.$ His employer puts an additional $$2,000$ into a $401($k$)$ retirement plan. This retirement amount currently equals $$4,000$ and it is invested in a stock mutual fund, which has been earning an annual rate of return of $10\mathrm{.}0\%.$ With the current level of the federal debt, Perry is not counting on receiving any funds from social security at his retirement.

With all of the concern about college tuition increasing over the years, Perry believes that the children will have to go to the local junior college for their first two years and then a state school for their last two years. The cost to attend the local junior college is $$3,000$ per year today, and the cost to attend a state school is $$10,000$ per year today.

Inflation will have a great impact on Perry$$s future retirement and college plans for his children. Based on what he has read and heard on the news, Perry believes that inflation will average $4\mathrm{.}0\%$ per year for the next $40$ years; however, the cost of a college education will increase by $7\mathrm{.}0\%$ per year for the junior college and state school. Also, with the desirability of vacation homes, the house and property in Pennsylvania will probably increase at a rate of $6\mathrm{.}0\%$ per year, while his current home will increase in value at a rate of $5\mathrm{.}0\%$ per year. Perry hopes that his annual salary will increase by at least $3\mathrm{.}0\%$ per year.