Question 2 [5 pts]

Today is Dec. 31, 2020. David is planning to retire in 40 years from today. He believes he needs to save some money to support his living for at least 20 years, i.e., 2061 through 2080, after his retirement. David estimates that he will need $50,000 each year from Jan. 1, 2061 to Dec. 31, 2080. Assume that the interest rate is 10% and will be constant over time. Determine how much he needs to save by the end of 2060.

Answer (show the steps/calculation toward your results):