Mrs. Boko just celebrated 30th birthday. She plans to retire at the age of 65. She would like to be able to withdraw $150,000 per year from her retirement account for 30 years. That means her withdraw of first $150,000 will be made on her 65th birthday. She is also expecting an inheritance of $75,000 to be transferred to her on her 35th birthday.

a. How much does she need to have in her retirement account by retirement date if the interest rate is 6% per year during the post-retirement years? [6 marks]

b. Suppose she already has $12,000 in her retirement investment account that earns 9% per year. What will be the value of this amount by her retirement date? [4 marks]

c. Given her goal, her expected inheritance, and the investment she already has in 1b, how much does she need to invest per year from now till retirement (at 9% annual rate of return) to reach her retirement goal? [10 marks]