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Problem 2.1. Diana turned 45 years old today. She plans to retire when she turns 65. She expects to live 25 years after retirement. She
Problem 2.1. Diana turned 45 years old today. She plans to retire when she turns 65. She expects to live 25 years after retirement. She estimates she will need $60,000 each year (when she turns 66 years, 67 years, ..., 90 years) from retirement savings. The interest rate is 8% per year. a. How much retirement savings should she have when she retires (that is, when she turns 65)? 6 points b. Diana already has $25,000 in retirement savings today. She plans to save the same fixed amount each year over the next 20 years (when she turns 46 years, 47 years, ---, 65 years). How much should she save each year to meet her retirement goal? 6 points
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