CRPC exam 2023/2024 with 100% correct answers

Cindy wants to have an annual retirement income of $50,000 protected against 3% inflation. Assuming an 8% after-tax rate of return and a retirement period of 25 years, how much money does Cindy need in order to provide the inflation-protected $50,000 at the beginning of each retirement year? - correct answer BEG Mode # of Periods (1 P/YR in this example) C ALL 50000, PMT 4.8544, I/YR [(1.08 ÷ 1.03) - 1] × 100 = 4.8544 I/YR 25, N PV Solution: $749,812.61 Frank will retire in 14 years, and he needs to save an additional $380,000 to provide the retirement income that he wants. Assume that inflation is 4% and after-tax earnings are 10%. How much will Frank need to save at the end of each year to reach his goal? - correct answer END Mode # of Periods (1 P/YR in this example) C ALL 380000, FV 10, I/YR 14, N PMT Solution: $13,583.56 (The answer is actually -$13,583.56, as this represents an outflow to savings.) In this case, we do not need to make the inflation adjustment. This problem asks how much Frank needs to save at the end of each year, so the savings will be level. Remember, when the payment is level, the inflation adjustment is not called for. Inflation should have already been taken into account to calculate the need for an additional $380,000. Dan and Barbara have saved $850,000. Assume that inflation is 3% and after-tax earnings are 9%. Also assume that their retirement will last 26 years. How much annual retirement income, protected against inflation, can the $850,000 provide for 26 years with payments made at the beginning of each year? - correct answer BEG Mode # of Periods (1 P/YR in this example) C ALL 850000, PV 5.8252, I/YR [(1.09 ÷ 1.03) - 1] × 100 = 5.8252 I/YR 26, N PMT Solution: $60,721.17 The Smiths are a 50-year-old couple with an annual retirement budget of $75,000 (in today's dollars). They want to plan for a retirement life expectancy of 25 years (starting at age 65), and assume a 3.5% average inflation rate and a 7% long-term rate of return. How much money will they need at age 65 to fund t