Individual Retirement Accounts

1.How much in annual income will the Jordans require at retirement in three years when inflation averages 4 percent per year? Approximate your calculation to the next $100 level.
2.Assume that John will retire July 31, 1998. The Jordans will require the annual income computed in question 1 over their life expectancy. Assume the income stream will remain constant over years (i.e., there will be no inflation.) The payments will be received at the beginning of each year. How much capital would the Jordans require at John’s retirement to generate their desired income stream? Assume an 8 percent discount rate for the whole retirement period.
3.The Jordans are worried about the 8% rate of return on their investment(s) mya not be sustainable over a long period. They wish to be prepared. Assume 8% interest rate for the first 8 years of retirement and 6% of the remaining period. How much capital do the Jordans require? You will use this figure to ascertain whether the couple has saved enough in the following questions.
4.What will the value of the Jordans’ investment portfolio at ABC Securities grow to on July 31, 1998, if the expected rate of return is 8 percent?
5.What will be the value of the Individual Retirement Accounts on July 31, 1998, if they grow 8 percent annually