Q1: If you invested $200 today and expected consistent 10.93% annual returns (consistent with the 20-year average for the S&P Index from 2002-2021, including dividends), how much will it be worth when you retire 30 years from yesterday (hint: 30 years after the initial one-time investment)?

Q2: Now, you're thinking about taxes when you withdraw that money. Assuming the value you just calculated of what that $200 you invested today with expected 10.93% returns will be in 30 years, how much will it be if you withdraw all of that money at an ordinary tax rate of 22%?

Q3: Now, you decide you're going to save $100/year every year for 30 years until you retire. You begin investing your $100 on the first day of the year. Assuming 10.93% annual returns, how much will you have at retirement in 30 years?

Q4: What if you make that same investment from Q3, but now you begin investing $100 on the last day of each year?

Q5: Of questions 3 and 4, which would you prefer (as in, which will yield the larger dollar value at retirement)?

Q6: Now, you say you want to retire with $500,000 in 30 years. You will make 30 annual contributions to do so. You make all contributions at the end of each year. Assuming 10.93% annual returns, how much does your annual payment need to be?

Q7: Now, you are concerned about very high inflation and investor fees so you think you need to retire with more. Now, you want to retire with $900,000 in 30 years. You will make 30 annual contributions to do so. You make all contributions at the end of each year. Assuming 10.93% annual returns, how much does your annual payment need to be?

Q8: Explain what the payment amounts for questions 6 and 7 mean to the investor and why they differ so much.

Answer rating: 100% (QA)

Q1 If you invested 200 today and expected consistent 1093 annual returns consistent with the 20year average for the SP Index from 20022021 including dividends how much will it be worth when you retire ... View the full answer