math project

Save for Your Golden Years. NOW!!!

For those that will retire after the year 2050, it is very likely that the government’s promises of social security and other entitlements for retirees will be promises that cannot be kept. For this reason, it has become more important that young people have a plan for saving toward their own retirement. As you will soon be graduating and beginning your career, perhaps you should start considering how you need to prepare for the end of your career before it is too late.

The ultimate goal is to save enough money, so when you do retire, you will have enough money to live the rest of your life in a manner of your own choosing. In most cases, employers provide a means by which employees may save for their retirement. As you begin your career, you will have the opportunity to contribute toward a 401K, 403B, or some other plan. You will need to determine how much you will need to contribute each month in order to reach your goal for retirement at the age of 65.

Begin with how much you believe that you will need each month during your retirement years. Ignoring inflation and health costs (no one knows what they will be), create and provide a budget which includes housing, food, utilities, transportation, and entertainment. Next, determine how long you expect to live after the age of 65. This will be important to determine how much you will need to have saved upon your retirement at age 65. Assume that after retirement, you will be able to invest your money at a rate of 5%.

Last, you will need to determine how much you will need to save each month in order to meet your goals for retirement. Assume that you can invest your money at a rate of 8% until you retire at the age of 65.

Assume that you begin work on your 23rd birthday and retire on your 65th birthday. Determine your monthly contribution required if you began saving at the age of 23. Also, determine the monthly contribution required if you waited until you were 35. You might be surprised by what you find.

For this project, you will be calculating the value of investments over time and will need some formulas. The following formula gives the future value, , when regular deposits of dollars are invested times per year over a period of years when represents the annual interest rate.

The next formula gives the present value, P, required to regularly withdraw dollars times per year over a period of years when represents the annual interest rate.

This is a paper and should be treated as such. Include a title page, an introduction with a problem statement, a body that includes a description of your procedure (including equations) and a conclusion that summarizes your findings. Throughout the paper, write in sentences and paragraphs. As a general guide, the reader should be able to understand your report without looking at this assignment sheet.

Below, you will find a rubric I will be using to grade your report. Use it as a checklist to make sure you have included everything that is required. Some conventions that you might not be used to that are specific to writing mathematics papers are:

1. Variables and equations should be in italics. Use Insert/Equation in Word.

2. Never start a sentence with a variable name.

3. Define all variables immediately before or after they first appear.

4. Always use standard math notation (look at equations in your book).

5. Center and number equations you wish to refer to later.

6. Do not number parts, use section headings.

7. Number and put captions on all figures. Refer to them in your text.

8. Graphs should be placed within the text, not at the end of the paper.

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