Question
(a) Maria has just turned 35 years old. She earns an annual salary of $80000. She decided to deposit at the end of each year
(a) Maria has just turned 35 years old. She earns an annual salary of $80000. She decided to deposit at the end of each year 10% of her salary into an RRSP account with the objective of building a pension fund. She expects her salary to increase by 2% each year. Assuming that her pension fund earns 7%/year compounded annually, how much money will Maria have in her pension fund if she retires at age 60? (NOTE: If you did not fully answer part (a), assume for part (b) that the answer to (a) is $1000000. (b) Maria estimates that she will need $10000 per month for living expenses, starting upon turning 60. If t he pension money earns 3%/year compounded annually, how long will Maria be able to live with that pot of money?
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