Suppose you work fulltimeandthis job is generating a stable income for you.You are planning to start saving for your retirement.You are going to deposit$800every month into a saving account from now onwards.You found a promotion rate of savings account that pays 1.75% p.a., compounding monthly.Assuming that you are highly committedto this monthly contribution to your savings accountand will not withdraw this fund foranytype of spending.You are planning to retire in 40 years.

1. How much will you havein this savings accountwhen you retire40 years later? Show all work clearly. 

 

 2. Based on your calculated answer above, analys whether this saving is sufficient to cover your expenses after you retire.You estimated that you will need at least $500 perweekin your retirement days to meet yourbasic necessities.You anticipateto liveat least 30 more years after you retireand the forecasted interest rate during that period will be around 3.25%. 

 

3.If your answerto(b)is'yes', explain why that fund will be sufficient to support your daily retirement expenses.Use relevant figures for illustration.If your answer is'no', propose one other saving or investmentplanthat you would undertake to increase the amount of retirement funds.How much more do you need to save every month to meet your retirement needs? 

Answer rating: 100% (QA)

Calculating Retirement Savings 1 Future Value of Savings Formula Future Value FV Principal P 1 Inter... View the full answer