MATH 1316 A Bonus Problem
Write up the answer to this problem (show your work, write down the formulas you use) for up to ten (10) bonus points on Exam 3. Hank is 25 and has just begun his first real big people job. He is beginning to plan for his retirement because, If you fail to plan, you plan to fail. He considers that he will retire at age 65. (Note: How many years is Hank planning to work?) In retirement, he expects to need $3000/month to cover his expenses. Due to genetics and the overall health of his parents and grandparents, Hank figures his life expectancy to be 95. (Note: How long does Hank expect to live after he retires?) Hank figures (conservatively) that any investments he makes will return 6% compounded monthly.1. Use the Amortization Formula with Hanks monthly expenditures after retirement to ????=find exactly how much he needs to have saved while he is working.2. Use the FVOA Formula to find out how much Hank needs to set aside each month to achieve his goal.a) Calculate the regular investment if Hank starts saving now (age 25).b) Calculate the regular investment if Hank starts saving at age 35.c) Calculate the regular investment if Hank starts saving at age 45.d) Calculate the regular investment if Hank starts saving at age 55.3. (Open ended) What criticisms can you think of with Hanks plan?
