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Each year, for the next 40 years, you will deposit an equal sum of money into a fund that pays 12% interest, to help
Each year, for the next 40 years, you will deposit an equal sum of money into a fund that pays 12% interest, to help pay for 25 years of retirement expenses. Starting 40 years from now (at the end of the 40th period), you will make a lump- sum withdrawal in constant 2021 dollars = $500,000. This will be followed by equal annual withdrawals, in constant %3D 2021 dollars, for 25 years (periods 41 through 65). The amount you will withdraw is $50,000 per year, in constant 2021 dollars. The inflation rate is 3.5%. Use i' with constant dollars to solve part B. Draw a cash flow diagram and show your work. . Calculate i' b. Draw a cash flow diagram . Determine how much, in constant 2021 dollars, must you must deposit into the account each year?
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