Use a salary of 65000 dollars per year with a 3367 increase

Use a salary of 65,000 dollars per year with a 3.367% increase every year for 35 years. Assume a mortgage of 650,000 paid over 25 years. Assume a car payment of 50,000 dollars paid over 15 years. Assume a yearly spending of 60,000 per year in retirement. Make any other nessesary assumptions or change assumptions given if needed.

Estimate your expenses over time. Be sure to consider taxes on your salary (assume a constant 35% tax rate) and property tax (assume the \"mill rate\" to be 0.0106 meaning that the property tax would equal 0.0106 times the value of your home) Show your calculations for paying off major expenses like a mortgage or cars. Show the accumulation of savings for retirement. This must be consistent with your expenses, salary, etc. Use 6% as an annual, long term rate of return (interest rate) for the money you save. Show either the use of money during retirement (how much each year) or the average annual amount and number of years you will be able to spend that amount 2. 3. 4. 5.

Solution

2.

3. Assumed interest rate on property mortgage of 7% and on car loan as 8%

4.

5.

Table A : Assuming interest is accrued on savings at 6% after retirement:

Table B : Assuming no interest is accrued on remaining savings

	(a)	(b) = (a)*0.35	(c ) 650,000*0.0106	(d) Refer to Part 3	(b+c+d)
Year	Salary (a)	Salary tax	Property tax	Property Installment	Car Installment	Expenses
1	65,000	22,750	6,890	55,777	5,842	91,259
2	67,189	23,516	6,890	55,777	5,842	92,025
3	69,451	24,308	6,890	55,777	5,842	92,817
4	71,789	25,126	6,890	55,777	5,842	93,635
5	74,206	25,972	6,890	55,777	5,842	94,481
6	76,705	26,847	6,890	55,777	5,842	95,356
7	79,288	27,751	6,890	55,777	5,842	96,260
8	81,958	28,685	6,890	55,777	5,842	97,194
9	84,718	29,651	6,890	55,777	5,842	98,160
10	87,570	30,650	6,890	55,777	5,842	99,159
11	90,518	31,681	6,890	55,777	5,842	100,190
12	93,566	32,748	6,890	55,777	5,842	101,257
13	96,716	33,851	6,890	55,777	5,842	102,360
14	99,972	34,990	6,890	55,777	5,842	103,499
15	103,338	36,168	6,890	55,777	5,831	104,666
16	106,817	37,386	6,890	55,777		100,053
17	110,414	38,645	6,890	55,777		101,312
18	114,132	39,946	6,890	55,777		102,613
19	117,975	41,291	6,890	55,777		103,958
20	121,947	42,681	6,890	55,777		105,348
21	126,053	44,119	6,890	55,777		106,786
22	130,297	45,604	6,890	55,777		108,271
23	134,684	47,139	6,890	55,777		109,806
24	139,219	48,727	6,890	55,777		111,394
25	143,907	50,367	6,890	55,764		113,021
26	148,752	52,063	6,890			58,953
27	153,760	53,816	6,890			60,706
28	158,937	55,628	6,890			62,518
29	164,288	57,501	6,890			64,391
30	169,820	59,437	6,890			66,327
31	175,538	61,438	6,890			68,328
32	181,448	63,507	6,890			70,397
33	187,557	65,645	6,890			72,535
34	193,872	67,855	6,890			74,745
35	200,400	70,140	6,890			77,030