Answer to part E

You are trying to decide how much to save for retirement. Assume you plan to save $7000 per year with the first investment made 1 year from now. You think you can earn 6.0% per year on your investments and you plan to retire in 37 years immediately after making your last $7000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $7000 per year, you wanted to make one lump sum investment today for your retirement, how much would that lump sum need to be? c. If you hope to live for 28 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings after 28 withdrawals (assume your savings will continue to earn 6.0% in retirement)? d. If, instead, you decide to withdraw \$178 000 per year in retirement (again with the first withdrawal one year after retiring), how many years will it take until you exhaust your savings? e. Assuming the most you can afford to save is $1400 per year, but you want to retire with $1000000 in your investment account, how high of a return do you need to earn on your investments? a. The amount in the retirement account in 37 years would be S. (Round to the nearest cent.) b. You will need to make one lump sum investment today of $ (Round to the nearest cent.) c. The amount you can withdraw every year in retirement is $. (Round to the nearest cent.) d. You will exhaust your savings in years. (Round to two decimal places.) e. You will need a return of %. (Round to two decimal places.)