Problem 5-35 Spreadsheet Problem: Investing for Retirement and Retirement Annuity (LG5-2, LG5-9) Consider a person who begins contributing to a retirement plan at age 25 and contributes for 40 years until retirement at age 65. For the first 10 years, she contributes $268 per month. She increases the contribution rate to $434.67 per month in years 11 through 20. This is followed by increases to $851.33 per month in years 21 through 30 and to $1,268 per month for the last 10 years. This money earns a 5 percent return. First compute the value of the retirement plan when she turns age 65. Compute the monthly payment she would receive over the next 40 years if the wealth was converted to an annuity payment at 2 percent. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Value of retirement assets Monthly payment

Problem 5-35 Spreadsheet Problem: Investing for Retirement and Retirement Annuity (LG5-2, LG5-9) Consider a person who begins contributing to a retirement plan at age 25 and contributes for 40 years until retirement at age 65. For the first 10 years, she contributes $268 per month. She increases the contribution rate to $434.67 per month in years 11 through 20. This is followed by increases to $851.33 per month in years 21 through 30 and to $1,268 per month for the last 10 years. This money earns a 5 percent return. First compute the value of the retirement plan when she turns age 65. Compute the monthly payment she would receive over the next 40 years if the wealth was converted to an annuity payment at 2 percent. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Value of retirement assets Monthly payment

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter17: Retirement And Estate Planning

Section: Chapter Questions

Problem 4FPC

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