5. Design a diversified saving and investment plan that includes strategies compatible with personal goals. Include the time value of money and compound interest calculations in the analysis.?

Tilly would like to invest $2500 of before-tax income each year in an RRSP account or in alternative stock investments. She likes the alternative investments because they provide her with more flexibility and a potentially higher return. She would like to retire in 30 years. If she invests money in an RRSP account, she can earn 7 percent per year, compounded monthly. If she invests in alternative stock investments, she can earn 9 percent per year, compounded monthly. Tilly is in the 30 percent marginal tax bracket. a. If Tilly invests all of her money in the RRSP account and withdraws all of her income when she retires, what is her income after taxes? b. If Tilly invests all of her money in alternative stock investments, what are her savings at retirement? (Hint: Remember that the income is taxed prior to investment.) c. Assuming a marginal income tax rate of 30 percent, what is the aftertax value of the alternative stock investment? d. Should Tilly invest her money in the RRSP account or in the 4. alternative stock investments