Using the TVM Calculator, please answer the following:
Calculating Retirement: Abby, age 27, realizes she needs $1,500,000 to retire on (in addition to her company's pension and social security benefits). She thinks she can earn a 10% return. She wishes to retire at the age of 65. How much should she start putting into a monthly savings plan?
(a) $ .
If Abby started saving the same amount per month 5 years earlier, at age (b) _______, she would have earned (c) $__________. So, beginning to save 5 years earlier would have earned Abby how much more money in retirement?
(d) $ . [Show all work/process for full credit]
A) PV
B) PV
PMT
PMT
FV
FV
RATE
RATE
PERIOD
PERIOD
COMPOUNDING
COMPOUNDING
C) PV
D) PV
PMT
PMT
FV
FV
RATE
RATE
PERIOD
PERIOD
COMPOUNDING
COMPOUNDING
College Savings: Today's cost for a good college education (4 years) including room, food, and books runs approximately $147,000. If you have two kids, ages 2 and 4, how much will college be, assuming 3% inflation in (a) 16 years for the 2-year-old? $ __________ and in (b) 14 years for the 4-year-old? $_______.
If you can earn 12% on what you are saving, how much should you save each month for the 2-year-old? (c) $_________ for the 4-year-old? (d) $ . [Show all work/process for full credit]
PV
PV
PMT
PMT
FV
FV
RATE
RATE
PERIOD
PERIOD
COMPOUNDING
COMPOUNDING
PV
PV
PMT
PMT
FV
FV
RATE
RATE
PERIOD
PERIOD
COMPOUNDING
COMPOUNDING