Question

How to do this?

4-5 Applications Name We'll begin this assignment by looking at the savings plan for Joe, a 10-year-old with a seady job making $30.000 a year, with an annual raise of 49. Looking ahead to the future, Joe commits to saving 125 of his earnings every year. He chooses a fixed Tund investment that returns 9 annually. The following graph shows Joe's earnings, the amount of money he spends, and the amount of money that is generated in interest on his investment cach year. The purple curve isn't the amount he's saved; it's the amount of interest earned each year. The values on the xaxis represent Joe's age in years. SI SIX SIDO S . 500.000,00 Age The investment income graph displays the true magic of exponential growth: The income is limited when Joe's a young guy. but as he gets closer to thinking about retirement, the income really takes off. Notice that at age 65, something awesome hap- pens: The income that Joe's making from his investments is more than his living expenses. At that point, he can retire and live as well as ever without you know, working for a living. Sweet! This age is known in financial circles as the crossover point Use the information provided to answer Questions 1-5 1. How much money is Joe earning when he's 30? How much money is he allowing himself to spend when he's 207 Show i calculation, then describe whether or not your answer seems correct based on the graph.

Answer 1

Answer The Saving plan 20 year a steady job making 30,000 (1) The - The money joe ecorning hei 30 earns 30000 at age 30 (2) The spend 30. Seems correct based on the Joy Saves 12% hit earning at age 30 he spend 88% . earning 30000 x 88 300 Too 30000X0-88 726400 age 30 Joy allow 26400 Spend from graph .as correct

③ The earning as calcekeled based on the annual relative growth Les Correct based - Jogs Relateic growth rate per year 4% at age ao earns 10000 after 5 year at age 35 A = 30000. ( = 30000 (1-21665) 2.36499.5870 from grouph our answer is correct (4) The spend 35 seems Joy's. spending = 36499.5870x58 100 36499.5870 X 0.88 -32119.6366 Age 235. Joy Sepend - 3211926366 . graph it is correct.