Question

Python problem:

An insurance salesperson knows the following about a client:

• The year the client was born.
• The age the client wants to retire.
• The annual amount the client can contribute to an IRA.

The insurance agent wants to know the following:

• The number of years until the client retires.
• The number of years until the client is required to take Required Minimum Distributions.
• The balance of the IRA at the age the client wants to retire.
• The balance of the IRA at the age Required Minimum Distributions (RMD) are to be taken.
• The Required Minimum Distribution that must be taken.

The formula to calculate the balance of the IRA is:

    B = (((1 + r)n - 1) / r) * A

where:

• B is the balance
• r is the interest rate
• n is the number of years
• A is the annual amount

The formula to calculate the Required Minimum Distribution is:

    RMD = B / DP

where:

• RMD is the Required Minimum Distribution to be taken
• B is the balance
• DP is the Distribution Period

Assume the following:

• The client is younger than the age they want to retire.
• The age Required Minimum Distributions are to be taken is 70.
• The expected interest rate is 5%. (Note: 5% will be 0.05 in the formula above)
• The Distribution Period is 27.4

Instructions

Algorithm

Set required minimum distribution age equal to 70
Set expected interest rate equal to 0.05
Set distribution period equal to 27.4
set current year to 2020

Get user input for birth year
Get user input for the age the user would like to retire
Get user input annual contribution to IRA

Add birth year to retirement age and save as retirement year
Subtract current year from retirement year and save as years until retirement
Add birth year to the required minimum distribution age and save as year of required minimum distribution 
Subtract current year from year of required minimum distribution and save as years until required minimum distribution

To calculate the balance of the IRA for the user's retirement year do the following formula:    
    First find the sum of one plus expected interest rate. Then raise the total to the power of years until retirement.  
    Subtract this total by one
    Then divide your new total by expected interest rate
    last multiply your final number by annual contribution to IRA
Save this number from the formula above to balance at retirement age

To calculate the balance of the IRA for the users required minimum distribution age do following formula:
    first find the sum of one plus expected interest rate. Then raise the total to the power of the required minimum distribution age. 
    Subtract this total by one. 
    then divide your new total by expected interest rate
    last multiply your final number by annual contribution to IRA
Save this number from the formula above to balance at required minimum distribution age

Now to calculate the required minimum distribution that must be taken out.  
Complete the following formula 
    balance at required minimum distribution age divided by distribution period
Save this total from the formula above as required minimum distribution

display current year
display birth year
display retirement age
display annual contribution to IRA
display years until retirement
display years until required minimum distribution
display balance at retirement age
display balance at required minimum distribution age
display required minimum distribution

Answer 1

min_distribution_age = 70 # required minimum distribution age

interest_rate = 0.05 # expected interest rate

distribution_period = 27.4 # distribution period

current_year = 2020 # current year

birth_year = int(input("Enter birth year"))

retirment_age = int(input("Age of retirement"))

IRA_annual = float(input("Annual IRA contribution"))

retirment_year = birth_year + retirment_age # retirement year

year_until_retire = retirment_year - current_year # years until retirement

year_req_min_dist = birth_year + min_distribution_age # year of required minimum distribution

year_until_min_dist = year_req_min_dist - birth_year # years until required minimum distribution

# calculate balance at retirement age

balance_retirement_age = ((((1+interest_rate)**year_until_retire) -1) / interest_rate) * IRA_annual

# calculate the balance of the IRA for the users required minimum distribution age

balance_min_dist_age = ((((1 + interest_rate) * min_distribution_age) - 1) / interest_rate) * IRA_annual

# calculate required minimum distribution

req_min_distribution = balance_min_dist_age / distribution_period

print("Current year : {}".format(current_year))

print("Birth year : {}".format(birth_year))

print("Returement age: {}".format(retirment_age))

print("Annual contribution to IRA : {}".format(IRA_annual))

print("Years untill retirement : {}".format(year_until_retire))

print("Year unitll required minimum distribution : {}".format(year_until_min_dist))

print("Balance at retirment age : {}".format(balance_retirement_age))

print("Balance at required minimum distribution age : {}".format(balance_min_dist_age))

print("Required minimum distribution : {}".format(req_min_distribution))