1. How old are you? At what age do you hope to retire? These questions are really about answering: How many years do you have until your retire?
2. Assume you are about to set up a new retirement savings account at a 4% annual interest rate (APR). Based on how you want to live in retirement, and any other sources of retirement income you have available, how much money do you think you will need to draw from your savings account each year?
3. What contribution plan can you follow in order to finance your new retirement account to reach this savings goal?
Note that each of you will have different answers, as you are different ages and may have different savings goals. You don't need to reveal private information here - your answers to questions 1 and 2 can be any numbers you choose, and need not be about your true age and finances.
There also won't be a single "right" answer, as there are several ways to achieve your financial goals. However, you must use the material from this section to solve the problem.
Submit a written solution to this problem. Be sure to answer all parts of the problem, and to state your conclusions clearly and explicitly. You may use any information or ideas from the discussion board, but you are expected to write your solution yourself, using your own words to explain your reasoning. Explaining your reasoning in clear, mathematically-accurate language, using complete sentences and proper grammar, are critical to your write up.
The report should be no more than 3 pages. Ideally, your solution will be typed in MS-Word, although you may hand-write mathematical expressions (in dark pen) if need be, and then scan your paper, check that all hand-written portions are legible, and upload it.
Your problem write-up is due on the last day of the module (second Sunday).
I would use the following formula
FV = R[(1 + r)^n - 1 ] / r
n=number of payments
In this application, you would be saving the same amount R each month. So if you are 44 and want to retire at 50 that ...
The age and retirement savings income is examined. What contribution plan you should follow in order to finance a new retirement account to reach a savings goal is determined.