You plan to retire in exactly 23 years. Your goal is to create a fund that will allow you to receive $22,000 at the end of each year for the 35 years between retirement and death (a psychic told you that you would die exactly 35 years after you retire). You know that you will be able to earn 12% per year during the 35-year retirement period.

A. How large a fund will you need when you retire in 23 years to provide the 35-year, $22,000 retirement annuity?

B. How much will you need today as a single amount to provide the fund calculated in part A if you earn only 10% per year during the 23 years preceding retirement?

C. What effect would an increase in the rate you can earn both during and prior to retirement have on the values found in parts A and B? Explain.

D. Now assume that you will earn 11% from now through the end of your retirement. You want to make 23, end-of-year deposits into your retirement account that will fund the 35-year stream of $22,000 annual annuity payments. How large do your annual deposits have to be?