Question
Nicole has two main financial goals in her life. Her first wish is to retire in 35 years and receive a pension of 10,000 euros
Nicole has two main financial goals in her life. Her first wish is to retire in 35 years and receive a pension of 10,000 euros every month for 20 years. Secondly, she wishes is to bequeath 1,000,000 euros to her daughter Karin after her death, which is expected to happen exactly 20 years after her retirement. You may assume that in the first 10 years from today, Nicole can save a maximum of 1,800 euros every month. Your task would be to find how much Nicole should save monthly during the remaining 25 years until her retirement in order to fulfil her financial goals. You may assume that the interest rate is 6% per year (or equivalently 0.5% per month) and it remains constant during the entire time horizon considered in this example.
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