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Your client is 40 years old. She wants to begin saving for retirement, with the first...

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Finance

Your client is 40 years old. She wants to begin saving forretirement, with the first payment to come one year from now. Shecan save $12,000 per year, and you advise her to invest it in thestock market, which you expect to provide an average return of 7%in the future.

  1. If she follows your advice, how much money will she have at 65?Round your answer to the nearest cent.

    $  

  2. How much will she have at 70? Round your answer to the nearestcent.

    $  

  3. She expects to live for 20 years if she retires at 65 and for 15years if she retires at 70. If her investments continue to earn thesame rate, how much will she be able to withdraw at the end of eachyear after retirement at each retirement age? Round your answers tothe nearest cent.

    Annual withdrawals if she retires at 65: $

    Annual withdrawals if she retires at 70: $

Answer & Explanation Solved by verified expert
3.7 Ratings (523 Votes)
aInformation provided Annual saving 12000 Interest rate 7 Time 25 years The question is solved by calculating the future value Enter the below in a financial calculator to compute the future value PMT 12000 N 25 IY 7 Press the CPT key and FV to compute the future value    See Answer
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