None.

Note: Please demonstrate your program to me before leaving lab today.

A Roth IRA is a mechanism for retirement savings. Investing in a Roth IRA may allow you to avoid paying a significant amount of taxes. In this assignment, you will write a program to explore whether or not investing in a Roth IRA makes sense for you.

Your program should ask for the following information:

• Years to graduation (gradYr)
• Years to retirement (retireYr)
• Current tax rate (curTax)
• Tax rate upon graduation (futTax)
• Expected loan interest rate (loanAPR)
• Expected investment rate of return (iraAPR)
• Initial investment amount (must be no more than $7000) (initAmnt)

Your program analyze this data and write a table similar to file. The table should have one row for year between now and your retirement. The table should be formatted in a visually pleasing mannor and should look something like this:

     |     Invest Now        | Invest after Job
Year | Borrowed   IRA value  |     IRA value   
-----+-----------------------+------------------
  0  | $7700.00    $7000.00  |         $0.00
  1  | $8277.50    $7700.00  |         $0.00
  2  | $8898.31    $8470.00  |         $0.00
  3  | $9565.69    $9317.00  |         $0.00
->4  |    $0.00   $10248.70  |      $7173.26
  5  |    $0.00   $11273.57  |      $7890.59
  6  |    $0.00   $12400.93  |      $8679.64
...

If we label the columns A, B, C, and D, and use the year number as the row number,

• Column A represents the year
• Column B and C present results using an approach of borrowing money now so that you can invest in an IRA while you are still a student.
• Column B represents the amount of money still owed
• Column C represents the value of your Roth IRA investment
• Column D presents results using an approach of waiting until you have your first job before investing in a Roth IRA. The column represents the value of your Roth IRA investment.

The input values used to generate the sample table were:

• gradYr = 4
• retireYr = 47
• curTax = 0.10
• futTax = 0.25
• loanAPR = 0.075
• iraAPR = 0.10
• initAmnt = 7000

Here are how many of the table values were calculated:

• B0 = initAmnt x (1+curTax)
• C0 = initAmnt
• B1 = B0 x (1+loanAPR)
• C1 = C0 x (1+iraAPR)
• B2 = B1 x (1+loanAPR)
• C2 = C1 x (1+iraAPR)
• B4 = 0 since loan gets paid off
• D4 = B3 x (1-futTax) post tax dollars available to invest (since you didn't have to pay off the B3 loan amount)
• C5 = C4 x (1+iraAPR)
• D5 = D4 x (1+iraAPR)

Submit your .cpp source file as the main file and the output file produced by your program as the support file. The output file submitted should be the one produced using the following input values:

• gradYr = 3
• retireYr = 50
• curTax = 0.10
• futTax = 0.25
• loanAPR = 0.17
• iraAPR = 0.09
• initAmnt = 5000

This laboratory assignment was developed by Dr. Chris Taylor.

© 2001-2006 Dr. Christopher C. Taylor

Office: CC-36C

Phone: 277-7339