• Submit this in Excel. Determine how much money Martha needs to save per year for retirement. Martha is currently 35 years old, plans to retire at 70; she expects to live until 85. She would like to have $85,000 a year in retirement income. She assumes an annual return of 7%, which includes the effects of inflation. She plans on annual deposits and withdrawals at the end of the year.
  • What is the total amount that he needs to have in savings when he retires? Hint: Look at how many years he expects to be retired and how much income he wants per year. Ask yourself how often are the payments being made and when will he have the total amount? This will help you determine if this is a lump sum or annuity problem and a present value or future value problem.
  • Once you have the amount that he needs at age 70, determine how much does he need to save per year until he retires? Hint: remember the impact of compounding and the questions to ask yourself.