Please explain this in terms of how to solve using a financial calculator. MEaning what to enter for the [N, P=I/YR, PMT, PV, FV] keys for each scenario. I put my calculations below. Please versify and explain any discrepancies.

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Question:

You want to know in which scenario you need to save the LEAST amount of money monthly. First plan is to have $1,250,000 in 25 years when you retire and your investments will earn 9%. The second option is to receive a monthly payment of $6,000 in retirement (your retirement will last 25 years) and you will earn a 4% rate of return on your investments in retirement. You have already saved $40,000 in one investment that will earn 7%, and $20,000 in a money market account that will earn 1.5%.

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My calculations:

Savings:

40000 @7%

N: 25

I: 7

PMT: n/a

PV: 40000

FV: solve = 217097.31

20000 @ 1.5%

N: 25

I: 1.5

PMT: n/a

PV: 20000

FV: solve = 29018.91

Combined future savings already invested: 217097.31+29018.91 = 246116.22

Option 1:

• goal is to have 1250000 in 25 years
• 125000-altready invested total 1250000-246116.22 = 1003883.78

N: (25*12) = 300

I: (9/12) = .75

PMT: solve = 895.43 monthly payment

PV: n/a

FV: 1003883.78

Option 2

N: (25/12) = 300

I: (4/12) = .3333

PMT: -6000

PV: solve = 1136714.90

FV: n/a

Option 2 FV: 1136714.90- 246116.22 = 890598.68

N: (25*12) = 300

I: (4/12) = .3333

PMT: solve = 1732.25 monthly payment

PV: n/a

FV: 89059868

Answer: option 1 has a lower monthly payment at $895.43 per month.

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Please advise verify and advise in terms of using a financial calculator.