Question
Bella and Marie are twins and both of them are turning 25 today. Bella is hardworking and got a job immediately after graduation. As a
Bella and Marie are twins and both of them are turning 25 today. Bella is hardworking and got a job immediately after graduation. As a reward, the father began putting $3,500 per year into a trust fund for Bella on her 20th birthday, and he just made the sixth payment into the trust today on Bellas birthday. The father will continue to put in $3,500 per year until a 41st and final payment is made on Bellas 60th birthday.
The father did not do the same for Marie because she refused to look for a job after graduation and was just sitting at home over the past 5 years. However, Marie has changed and got her first job today. So, the father decided to set up a trust fund for Marie as well. He will start making his first annual deposit of $4,000 one year from today and will continue with this same annual deposit each year until Marie turns 60 also, when the 35th and final payment will be made. The father wants both Bella and Marie to have the same retirement nest egg when they retire at 60, so he needs to do a catch-up deposit for Maries trust fund today. If both trust funds earn an annual return of 9%, how much must this catch-up deposit that the father needs to make today for Marie?
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