Problem: Studebaker has carefully analyzed how much he can afford to invest. He has decided that (1) he has $40,000 of "excess cash" and (2) his annual after-tax income could drop by $4,500 per year without any "lifestyle disruptions."
1. Redo your answer to question 2 assuming that the before tax money market rate is 5 percent per year and interest is compounded monthly.
2. Redo your answers to question 3 and 4 assuming that the SPA earns 7 percent per year, and the TDA pays 7.5 percent in years 1-10 and 6.5 percent in years 11-20.
How do I complete questions 1 and 2