Future value. You are a new employee with the Metro Daily

Planet.

The Planet offers three different retirement plans. Plan 1 starts the first day of work and puts

$1,100

away in your retirement account at the end of every year for

40

years. Plan 2 starts after 10 years and puts away

$2,600

every year for

30

years. Plan 3 starts after 20 years and puts away

$3,600

every year for the last

20

years of employment. All three plans guarantee an annual growth rate of

5%.

a.Which plan should you choose if you plan to work at the Planet for

40

years?

b. Which plan should you choose if you plan to work at the Planet for only the next

30

years?

c. Which plan should you choose if you plan to work at the Planet for only the next

20

years?

d. Which plan should you choose if you plan to work at the Planet for only the next

10

years?

e. What do the answers in parts (a) through (d) imply about savings?