Answer each of the following questions as well as the ones onthe attached file from 1 through 18 and provide your rational for yourchoice for each one. You will not receive full credit unless you provideyour explanation.

• Jasmine is 53-years old andearns $115,000 a year. She saves 12% of her annual gross income forretirement. Jasmine will pay off her mortgage by the time she retires.Her monthly payment is $1,950.21. Calculate Jasmin’s wage replacementratio using the top-down approach (round to the nearest %) and usingpre-tax dollars. Assume that she wants to maintain her lifestyle.
  • 60%
  • 68%
  • 80%
  • 88%
• Ralph,a 40-year-old nurse who earns $80,000 a year, saves 14% of his annualgross income. Assume that Ralph wants to maintain his exactpre-retirement lifestyle. Calculate Ralph’s wage replacement ratio usingthe top-down approach (round to the nearest %) and using pre-taxdollars.
  • 70%
  • 78%
  • 86%
  • 92%
• Colinis 40 years old and wants to retire in 27 years. His family has ahistory of living well into their 90s. Therefore, he estimates that hewill live to age 95. He currently has a salary of $150,000 and expectsthat he will need about 75% of that amount annually if he were retired.He can earn 8 percent from his portfolio and expects inflation tocontinue at 3 percent. Some years ago, he worked for the government andexpects to receive an annuity that will pay him $20,000 in todaysdollars per year beginning at age 67. The annuity includes a cost ofliving adjustment, which is equal to inflation. Colin currently has$200,000 invested for his retirement. His Social Security benefit intoday’s dollars is $30,000 per year at normal age retirement of age 67.How much does he need to accumulate at age 67 exclusive of his pensionand Social Security benefits?
  • $2.1 million
  • $2.2 million
  • $2.8 million
  • $2.9 million
• Jordanis 55 and wants to retire in 12 years. His family has a history ofliving well into their 90s. Therefore, he estimates that he will live toage 97. He currently has a salary of $100,000 and expects that he willneed about 82% of that amount annually if he were retired. He can earn 9percent in his portfolio and expects inflation to continue at 3%.Jordan currently has $325,000 invested for his retirement. His SocialSecurity benefit in today’s dollars is $30,000 per year at normal ageretirement of age 67. How much does he need to save each year at yearend to meet his retirement goals?
  • $6,245
  • $7,659
  • $8,432
  • $9,252
• Parkeris 50 and wants to retire in 15 years. His family has a history ofliving well into their 90s. Therefore, he estimates that he will live toage 95. He currently has a salary of $120,000 and expects that he willneed about 65% of that amount annually if he were retired. He can earn9% in his portfolio while he is working. However, he expects that hewill only earn 7 percent in his portfolio during retirement. He expectsinflation to continue at 3%. Parker currently has $350,000 invested forhis retirement. His Social Security benefit in today’s dollars is$30,000 per year at normal age retirement of age 67. His Social Securitybenefit will be reduced by 6 2/3 percent for each year he beginscollecting before full age retirement. How much does he need to saveeach year to meet his retirement goals?
  • $2,465
  • $2,987
  • $4,975
  • $6,855