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1 page/≈275 words

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APA

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Mathematics & Economics

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Math Problem

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# USING TVM PRINCIPLES (Math Problem Sample)

Instructions:

The analysis on retirement annuities presents a thorough examination of the financial considerations involved in setting aside funds for retirement. Utilizing time value of money principles to determine the required annual savings demonstrates a strategic approach to long-term financial planning. Additionally, recognizing potential flaws in the calculations, such as decimal inaccuracies and the impact of variable changes, highlights a thoughtful consideration of uncertainties inherent in financial projections. The proposed actions to ensure goal attainment, including regular tracking and assessment of finances, showcase a proactive approach to managing savings goals. Overall, the analysis reflects a comprehensive understanding of retirement planning strategies and prudent financial management practices. source..

Content:

Retirement Annuities
Name
Course
Institution
Professor
Date
Retirement Annuities
1. Using TVM principles, how much must you set aside each year to make sure that you hit your target goal if the interest rate is 5%?
F.V = C {(1+ r) n – 1]/r] × (1 + r)
F.V = Future Amount
C = Annual cash
I = interest rate
N = Number of periods
2000000 = C (1.05)35 -1)/0.05 × (1.05)
2,000,000 = C (94.84)
C = 2,000,000/ 94.84
C = 21,088.97 $ P.a
2. What flaws might exist in your calculations, and what variables could lead to different outcomes?
There might exist decimal place imperfections that could alter my calculation result. Several variables like changes in the interest rates, discounts, number of periods, present value, and taxes might increase the regular amount needed to be saved to reach my target.
3. What actions could you take ensure you reach your target goal?
To ensure I achieve my target goal, I should ensure to follow up regularly by reminding myself to track progress for an effective way to stay on top of my savings target goal; thus, setting up a money date will aid me in ensuring I achieve the exact target as I review my income, expense, and how much I have saved at the moment. Moreover, I should assess my finances to see my goals are running within the expected target as well as...

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