Gary Kornig will turn 30 years old next year. He comes up with a plan to save fo
ID: 2772036 • Letter: G
Question
Gary Kornig will turn 30 years old next year. He comes up with a plan to save for his retirement at 65 years of age. Currently, he has saved $6,950 in an IRA account earning 8.3 percent annually. He also currently has invested an inheritance of $5,000 in money market account earning 5.25 percent and plans to leave it as part of his retirement savings. He has set himself a retirement target of $1,000,000. He plans to put aside a fixed amount every year, starting next year, in a mutual fund that will earn 9 percent annually. Current age: Retirement age: IRA Account Current balance in IRA: Return on IRA account: Years to retirement: Value of IRA at retirement age: Value of IRA at retirement age: Money Market Account Current balance in Money Market: Return on Money Market account: Years to retirement: Value of Money Market at retirement age: Value of Money Market at retirement age: Savings Needed Target retirement balance: Future value of current savings: Amount needed to reach target: Expected return on mutual fund: Years to retirement: Annual deposit needed to reach target: Annual deposit needed to reach target: Gary Kornig will turn 30 years old next year. He comes up with a plan to save for his retirement at 65 years of age. Currently, he has saved $6,950 in an IRA account earning 8.3 percent annually. He also currently has invested an inheritance of $5,000 in money market account earning 5.25 percent and plans to leave it as part of his retirement savings. He has set himself a retirement target of $1,000,000. He plans to put aside a fixed amount every year, starting next year, in a mutual fund that will earn 9 percent annually.Explanation / Answer
Answer
$ 3582.09 MUST HE SAVE EACH YR TO MEET GOAL
Current age: 29 Retirement age: 65 IRA Account Current balance in IRA: 6950 Return on IRA account: 8.30% Years to retirement: 36 Value of IRA at retirement age: Factor 17.645113 Value of IRA at retirement age: 122,633.53 Money Market Account Current balance in Money Market: 5000 Return on Money Market account: 5.25% Years to retirement: 36 Value of Money Market at retirement age: Factor 6.309512 Value of Money Market at retirement age: 31,547.56 Savings Needed Target retirement balance: 1000000 Future value of current savings: 154,181.09 Amount needed to reach target: 845,818.91 Expected return on mutual fund: 9% Years to retirement: 36 Annual deposit needed to reach target:Factor 0.0042350 Annual deposit needed to reach target: 3,582.09Related Questions
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