Henry has just taken a new job which will pay him a starting salary of $100,000 per year. (Note: for simplicity assume that all payments in this problem occur at the end of the year). He expects to receive annual merit increases of 2%, so that his salary at the end of year 2 will be $102,000.00, at the end of year 3 will be $104,040.00, at the end of year 4 will be $106,120.80, etc. Henry is currently 35 years old and expects to retire at age 65, 30 years from now. He wants to accumulate enough savings in his companys 401(k) plan to fund level annual retirement income payments equal to 70% of his ending salary at age 65 for 35 years (i.e., to Harrys attained age 100). Assuming that retirement income payments will be made at the end of each year beginning at attained age 66, an effective annual interest rate of 6%, and ignoring taxes,

a. What percentage p of his annual salary should Henry set aside and invest into his 401(k) plan at the end of each year?

b. Is the percentage you calculated dependent on Henrys starting salary being $100,000, or would it be valid for any starting salary?

c. What will the accumulated value of Harrys contributions to the 401(k) be at the end of the first 15 years at Henrys attained age 55?