1. Sam and Sally (both age 35) plan to retire at age 65. They estimate their annual income need in retirement will be $50,000 in "today's dollars". They expect to receive $30,000 (in "today's dollars") annually from Social Security. They expect to earn 7% after-taxes both before and after retirement. They also expect inflation to be constant at 4%. They expect to live 30 years after retiring. What amount of money will Sam and Sally need at the beginning of the retirement period to fund an annual income need that increases with inflation? Select the correct answer and show all of your work.

a. $1,003,587

b. $1,117,225

c. $1,327,848

d. $2,943,062

e. $3,319,620