maxboy0801
New member
- Joined
- Nov 9, 2005
- Messages
- 12
1. If you went out and bought $50,000 worth of things
today, how much would it cost you to buy approximately
the same things at age 60? ( Let P =
50,000, r = .045 (4.5%), and let t = the number of years
until you are 60. So if you are 20 years old, the let t
= 60 – 20 = 40). Is this number what you expected?
Much higher/lower? Much scarier?
Do get you started, your formula should look something
Like this:
A = 50000(1 + .045)^(37)
Again, the ^ symbol means “to the power of”.
2. Do the same thing for problem #1, except let t = the
number of years until you are age 90. So if you are 31,
then n = 60 – 31 = 29. Does that number surprise you?
Is that depressing or what!?
3. Now make a table with two columns. One column
labeled “Age” and the other column labeled “Amount
Needed”. The second column is going to be the amount
you need for retirement, corresponding to your age that
year. So, your first entry for the “Age” column will be
60, and next to that will be your first entry for
“Amount Needed”, which will be your answer for the first
question (above). Now number the age column 61, 62, etc
all the way down to 90. Then using your TI-83,
calculate the amount you will need every year up to age
90. This sounds like a lot of work, but what you can do
is enter the numbers for question #1 (Let P = 50,000, i
= .045 (4.5%), and let t = the number of years until you
are 60) and then hit enter on your TI-83. Then hit the
yellow “2nd” key followed by the key where above it you
see “Entry”. You should see the same thing you just
typed in earlier. Now go in and change the t value
corresponding to you being age 61 and hit enter.
Continue this procedure all the way down until age 90.
What do you see happening?
That “little” 4.5% makes a big difference when you take
4.5% of big number doesn’t it!? Just to get you started,
IF you are 25 years old, then your calculations and
table would look like this (if you’re an age different than
age 25, then your numbers will of course be different):
P = 50000
i = .045
t = 60 – 25 = 35
At age 60, amount needed would be:
A = 50000(1.045)^35 = $233,367
At age 61, t = 61 – 25 = 36
So at age 61, amount need would be:
A = 50000(1.045)^36 = $243,869
So you’re the start of your table would look like this:
Age Amount Needed
60 233,367
61 243,869
And then you would want to complete this table until age 90.
4. Total up all the numbers in the “Amount needed” column.
Wow! That’s some serious money! How do you feel about
that? Don’t worry, we are going to use Algebra to
figure out a way to come up with that much money!
5. Now do you believe that you need at least $4,000,000
to retire at age 60?
GOOD LUCK GUYS!
today, how much would it cost you to buy approximately
the same things at age 60? ( Let P =
50,000, r = .045 (4.5%), and let t = the number of years
until you are 60. So if you are 20 years old, the let t
= 60 – 20 = 40). Is this number what you expected?
Much higher/lower? Much scarier?
Do get you started, your formula should look something
Like this:
A = 50000(1 + .045)^(37)
Again, the ^ symbol means “to the power of”.
2. Do the same thing for problem #1, except let t = the
number of years until you are age 90. So if you are 31,
then n = 60 – 31 = 29. Does that number surprise you?
Is that depressing or what!?
3. Now make a table with two columns. One column
labeled “Age” and the other column labeled “Amount
Needed”. The second column is going to be the amount
you need for retirement, corresponding to your age that
year. So, your first entry for the “Age” column will be
60, and next to that will be your first entry for
“Amount Needed”, which will be your answer for the first
question (above). Now number the age column 61, 62, etc
all the way down to 90. Then using your TI-83,
calculate the amount you will need every year up to age
90. This sounds like a lot of work, but what you can do
is enter the numbers for question #1 (Let P = 50,000, i
= .045 (4.5%), and let t = the number of years until you
are 60) and then hit enter on your TI-83. Then hit the
yellow “2nd” key followed by the key where above it you
see “Entry”. You should see the same thing you just
typed in earlier. Now go in and change the t value
corresponding to you being age 61 and hit enter.
Continue this procedure all the way down until age 90.
What do you see happening?
That “little” 4.5% makes a big difference when you take
4.5% of big number doesn’t it!? Just to get you started,
IF you are 25 years old, then your calculations and
table would look like this (if you’re an age different than
age 25, then your numbers will of course be different):
P = 50000
i = .045
t = 60 – 25 = 35
At age 60, amount needed would be:
A = 50000(1.045)^35 = $233,367
At age 61, t = 61 – 25 = 36
So at age 61, amount need would be:
A = 50000(1.045)^36 = $243,869
So you’re the start of your table would look like this:
Age Amount Needed
60 233,367
61 243,869
And then you would want to complete this table until age 90.
4. Total up all the numbers in the “Amount needed” column.
Wow! That’s some serious money! How do you feel about
that? Don’t worry, we are going to use Algebra to
figure out a way to come up with that much money!
5. Now do you believe that you need at least $4,000,000
to retire at age 60?
GOOD LUCK GUYS!
