Use a salary of 65,000 dollars per year with a 3.367% increase every year for 35
ID: 2610122 • Letter: U
Question
Use a salary of 65,000 dollars per year with a 3.367% increase every year for 35 years. Assume a mortgage of 650,000 paid over 25 years. Assume a car payment of 50,000 dollars paid over 15 years. Assume a yearly spending of 60,000 per year in retirement. Make any other nessesary assumptions or change assumptions given if needed.
Estimate your expenses over time. Be sure to consider taxes on your salary (assume a constant 35% tax rate) and property tax (assume the "mill rate" to be 0.0106 meaning that the property tax would equal 0.0106 times the value of your home) Show your calculations for paying off major expenses like a mortgage or cars. Show the accumulation of savings for retirement. This must be consistent with your expenses, salary, etc. Use 6% as an annual, long term rate of return (interest rate) for the money you save. Show either the use of money during retirement (how much each year) or the average annual amount and number of years you will be able to spend that amount 2. 3. 4. 5.Explanation / Answer
2.
3. Assumed interest rate on property mortgage of 7% and on car loan as 8%
4.
5.
Table A : Assuming interest is accrued on savings at 6% after retirement:
Table B : Assuming no interest is accrued on remaining savings
(a) (b) = (a)*0.35 (c ) 650,000*0.0106 (d) Refer to Part 3 (b+c+d) Year Salary (a) Salary tax Property tax Property Installment Car Installment Expenses 1 65,000 22,750 6,890 55,777 5,842 91,259 2 67,189 23,516 6,890 55,777 5,842 92,025 3 69,451 24,308 6,890 55,777 5,842 92,817 4 71,789 25,126 6,890 55,777 5,842 93,635 5 74,206 25,972 6,890 55,777 5,842 94,481 6 76,705 26,847 6,890 55,777 5,842 95,356 7 79,288 27,751 6,890 55,777 5,842 96,260 8 81,958 28,685 6,890 55,777 5,842 97,194 9 84,718 29,651 6,890 55,777 5,842 98,160 10 87,570 30,650 6,890 55,777 5,842 99,159 11 90,518 31,681 6,890 55,777 5,842 100,190 12 93,566 32,748 6,890 55,777 5,842 101,257 13 96,716 33,851 6,890 55,777 5,842 102,360 14 99,972 34,990 6,890 55,777 5,842 103,499 15 103,338 36,168 6,890 55,777 5,831 104,666 16 106,817 37,386 6,890 55,777 100,053 17 110,414 38,645 6,890 55,777 101,312 18 114,132 39,946 6,890 55,777 102,613 19 117,975 41,291 6,890 55,777 103,958 20 121,947 42,681 6,890 55,777 105,348 21 126,053 44,119 6,890 55,777 106,786 22 130,297 45,604 6,890 55,777 108,271 23 134,684 47,139 6,890 55,777 109,806 24 139,219 48,727 6,890 55,777 111,394 25 143,907 50,367 6,890 55,764 113,021 26 148,752 52,063 6,890 58,953 27 153,760 53,816 6,890 60,706 28 158,937 55,628 6,890 62,518 29 164,288 57,501 6,890 64,391 30 169,820 59,437 6,890 66,327 31 175,538 61,438 6,890 68,328 32 181,448 63,507 6,890 70,397 33 187,557 65,645 6,890 72,535 34 193,872 67,855 6,890 74,745 35 200,400 70,140 6,890 77,030Related Questions
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