3. 38.

Growing annuity [LO 6.1] Your job pays you only once a year for all the work you did over the previous 12 months. Today, 31 December, you just received your salary of $55 000 and you plan to spend all of it.

However, you want to start saving for retirement beginning next year.

You have decided that one year from today you will begin depositing 9 per cent of your annual salary in an account that will earn 10 per cent per year. Your salary will increase at 3 per cent per year throughout your career. How much money will you have on the date of your retirement 40 years from today?