a. The amount of the fund you will need when you retire in 24years to provide the 25?-year, ?$20,000 retirement annuity is?
b. The amount you will need today as a single amount to provide the fund calculated in part a if you earn only 7?% per year during the 24years preceding retirement is ?
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??
C. In the calculation of present values, you should notice that the higher the interest? rate, the lower the present value. ? Therefore, in part a and b both values would be:(lower, higher or equal)-(CHOOSE ONE)
In other? words, a (smaller, higher, or equal) (CHOOSE ONE) sum would be needed in 24 years for the annuity and a , (higher or equal or smaller) (CHOOSE ONE) amount would have to be put away today to accumulate the needed future sum.
PLEASE ANSWER QUESTION "C" WITH ALL OF THE 3 HIGHLIGHTED PARTS.
d. Now assume that you will earn 8?% from now through the end of your retirement. You want to make 24?, ?end-of-year deposits into your retirement account that will fund the 25?-year stream of ?$20, 000annual annuity payments. How large do your annual deposits have to be?