You have decided that you will need $350,000 above what your current retirement

Question

You have decided that you will need $350,000 above what your current retirement plan contains to survive and have a little fun when you retire. At the age of 30, you decide to start putting an amount into an annuity once a month. The account earns 5.5% compounded monthly. You plan to retire at the age of 65. Your savings plan is for exactly 35 years. Show your work and the formula used.

The purpose of this project is to broaden your awareness of how saving just a small amount per month over the years working in a career combined with the interest your investment will earn becomes a substantial savings for your retirement. In recapping what you have just calculated, please answer the following questions.

Remind yourself of how little you contributed per month_______________________

Remind yourself of how much you actually invested in the plan__________________

What was the total dollars the plan paid you in retirement? _____________________________________________________________

How much of this was earned from interest (remember this amount will include the interest earned while investing in the plan and while receiving money from the plan)? ______________________________________________________________

So basically the amount you contributed to your retirement was approximately what percentage of the total amount received? 8. 10% , 25%, 50%, 75% This is math 1324. Also, I need these worked out please!

Explanation / Answer

Amount Required = $350000

Investment Period = 35 years = 35*12 = 420 months

Interest Rate = 5.5% p.a = 0.4583% p.a

Let amount to be put in annuity per month be x

The Formula is

x * PVAF (0.4583%, 420) = $350000

x * 186.2151 = $350000

x = $1879.5468

Amount to be put in annuity per month = $1879.5468

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