Anne-Marie and Yancy calculate their current living expenditures to be $67,000 a year. During retirement, they plan
Question:
a. How much income, in today's dollars, will Anne-Marie and Yancy need in retirement, assuming 70 percent replacement and an additional $5,000 for the cruise?
b. Calculate their projected annual income shortfall in today's dollars.
c. Determine, in dollars, the future value of the shortfall 30 years from now, assuming an inflation rate of 5 percent.
d. Assuming an 8 percent nominal rate of return and 25 years in retirement, calculate their necessary annual investment to reach their retirement goals.
Future Value
Future value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth...
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Related Book For
Personal Finance Turning Money into Wealth
ISBN: 978-0133856439
7th edition
Authors: Arthur J. Keown
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