You save $600 every quarter (4 months) and plan to retire in 30 years. You are planning to spend 20 years in retirement.

You currently have an expected return on your savings before retirement of 10% (EAR) and and an expected return on savings during retirement of 15% (APR)

You also hope to be able to spend $5,000 each quarter (4 months) during retirement.

Questions (Using Excel).

1. What is the expected annual return on your savings before you retire (Converted to APR)

2. What is the amount you will have saved in your account at retirement based on the $600 you save ever quarter? (Using Excel FV)

3. What is the amount that you will be able to spend each period once you are retired?

4. How much more (or less) would you need to earn if you chose to retire FIVE years earlier than anticipated? (In APR)

5. Convert that APR to an EAR

6. Since you want to have $5,000 available to spend every quarter once you are retired, how much money will you need to have in your account? (USING PV FUNCTION in Excel)

7. What is the amount you need to save each period before you retire to meet that $5,000 a quarter goal? (USING PMT FUNCTION in Excel)