Upon retirement (40 years from now) you want to receive $2000 each month for a period of 28 years. This money resides in an account that pays 5.7% interest. How much money must be in the account to fulfill your goal?
1) You plan to deposit money every month for 40 years into an account that pays 5.1%. What monthly deposit must you make to achieve the amount of money determined in the answer to Part b above?
2) How much money did you actually deposit into the account?
3) How much money will you actually receive in payments during retirement?
4) You wait until later to start saving for retirement, and so are depositing money every month for only 20 years into an the same account that still pays 5.1%. What monthly deposit must you make to achieve the amount of money determined in the answer to Part b above?
5) How much money did you actually deposit in this plan?
6) How many times more costly is the monthly payment of Plan 2 (saving for 20 years) compared to Plan 1 (saving for 40 years)?