You are saving for your expected retirement at age 68 -- forty-eight years from

ID: 2638294 • Letter: Y

Question

You are saving for your expected retirement at age 68 -- forty-eight years from today. You plan to

invest $2,000 per year, in arrears, for the next forty-eight years and earn 5% per year.

a. How much would you have accumulated after making your 48th and final payment?

b. Because of school loans, furnishing your apartment, saving for a down payment on a condo,

etc., you decide to wait twelve years to begin your retirement savings. How much would you

have to invest for each of the remaining thirty-six years to accumulate the same amount as in

part a if you still earned five percent per annum?

Per year contribution =$2000

interest=5%

yrs.=48

total accumulation =$399531.5

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Interest=5%

Total accumulation=399531.5

yrs=36

yearly contribution=$3974

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