for the next $12$ years. Assume you will earn the historic stock market average of $12\%$ per year.

Click the icon to view the future value annuity factor table.$)\_($Click the icon to view the future value factor table.$)$

$($Click the icon to view the present value annuity factor table.$)($Click the icon to view the present value factor table.$)$

Read the requirements.

Requirements

Requirement $1.$ How much out$-$of$-$pocket cash will you invest under the two options?

Calculate how much out$-$of$-$pocket cash you will invest under the two options.

Option $1$: $ $ $144$ nn$$

Option $2$:

Requirement $2.$ How much savings will you have accumulated at age $52$ under the two options?

Calculate the total amount of savings that you will have accumulated at age $52$ under the two options. $($Round the savings to the nearest dollar amount.$)$

How much out$-$of$-$pocket cash will you invest under the two options?

How much savings will you have accumulated at age $52$ under the

two options?

Explain the results.

If you let the savings continue to grow for ten more years $($with no

further out$-$of$-$pocket investments$),$ under each scenario, what will the

investment be worth when you are age $62?$

Option $1$: $$1,158,398$

Option $2$:

Requirement $3.$ Explain the results.

The strategy involving earlier savings grows substantially larger over time. This is due to the fact that the savings are invested sooner $,$ so time does the work.

Calculate the total amount of savings at age $62,$ with no further out$-$of$-$pocket investments, under each scenario. $($Round the savings to the nearest dollar amount.$)$

Option $1$:Assume you want to retire early at age $52.$ You plan to save using one of the following two$$ strategies: $(1)$ save $ $4$ comma $800$ a year in an IRA beginning when you are $22$ and ending when you are $52(30$years$)$ or$(2)$ wait until you are $40$ to start saving and then save $ $12$ comma $000$ per year for the next $12$ years. Assume you will earn the historic stock market average of $12\%$ per year.

LOADING...$($Click the icon to view the future value annuity factor$$ table.$)$ LOADING...$($Click the icon to view the future value factor$$ table.$)$

LOADING...$($Click the icon to view the present value annuity factor$$ table.$)$ LOADING...$($Click the icon to view the present value factor$$ table.$)$

Read the requirementsLOADING....

Question content area bottom

Part $1$

Requirement $1.$ How much$$ out$-$of$-$pocket cash will you invest under the two$$ options?

Calculate how much$$ out$-$of$-$pocket cash you will invest under the two options.

Part $2$

Option $1$:

$$144,000$

Option $2$:

$$144,000$

Part $3$

Requirement $2.$ How much savings will you have accumulated at age $52$ under the two$$ options?

Calculate the total amount of savings that you will have accumulated at age $52$ under the two options. $($Round the savings to the nearest dollar$$ amount.$)$

Option $1$: