1. (Week 2,25 pts) Your new job pays you $50,000/year. Your parents offered to manage retirement investments for you, with safe bonds guaranteeing a return of 0.5%/year return or a riskier portfolio that could give you anywhere between -5% to 20% a year. Alternatively, your new job also has its own savings program in which they match 50% of you annual contributions, with an expected annual return of 3%/year. a) Briefly describe 2 possible plans on how to handle your money until retirement, using information from the text or reasonable assumptions. Include concepts and economy analysis tools from class discussion (no calculations needed). (10 pts.) b) Assume you decided to take advantage of your company's offer. At the end of each year of work, you expect to invest 10% of your annual salary in their account for a 50% matching contribution and a yearly return of 3%/year. You are unsure how your salary might change in the future, so you assume you will invest an additional $100 each year, starting on year 2 (i.e., you invest an extra $100 on year 2. $200 on year 3, $300 on 4 and so on). Assuming you want to retire in 40 years, what present value can you expect to have in your account at the end of the fortieth year? (15 pts.) 1. (Week 2,25 pts) Your new job pays you $50,000/year. Your parents offered to manage retirement investments for you, with safe bonds guaranteeing a return of 0.5%/year return or a riskier portfolio that could give you anywhere between -5% to 20% a year. Alternatively, your new job also has its own savings program in which they match 50% of you annual contributions, with an expected annual return of 3%/year. a) Briefly describe 2 possible plans on how to handle your money until retirement, using information from the text or reasonable assumptions. Include concepts and economy analysis tools from class discussion (no calculations needed). (10 pts.) b) Assume you decided to take advantage of your company's offer. At the end of each year of work, you expect to invest 10% of your annual salary in their account for a 50% matching contribution and a yearly return of 3%/year. You are unsure how your salary might change in the future, so you assume you will invest an additional $100 each year, starting on year 2 (i.e., you invest an extra $100 on year 2. $200 on year 3, $300 on 4 and so on). Assuming you want to retire in 40 years, what present value can you expect to have in your account at the end of the fortieth year? (15 pts.)