Answer a&b

Stefani Gorman, a 40-year-old woman, plans to retire at age 65 , and she wants to accumulate $480,000 over the next 25 years to supplement the retirement programs provided by the foderal government and her employer. She expects to earn an average annual retum of about 6% by investing in n low-risk portolio containing about 20% short-term securbies, 30% common stock, and 50% bonds. Stefani currently has $34,950 that at an annuar rate of return of 6% will grow to about $150,000 by her 65 th birthday (the $150,000 figure is found wing time value of money techniques, Chapter 4 Appendix) Sietani consults a financial advisor to determine how much money sho should save each year to meet her retirement savings objective. The advisor tells Siofari that if ahe saves ab $18.23 each year, she will accumulase $1,000 by age 65 . Saving 5 times that amount each year, $91.15, allows Stefani to accumulate roughy $5,000 by age 65 . a. How much addinional money does Stetani need to accumulale over time to reach her goal of $480,000 ? b. How much must Stefari save to accumulate the sum calculated in part a over the next 25 years