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Question: Martha found a job paying him $48,000 per year, paid at the beginning of each month. Her salary grows by 3% per year. She
Question: Martha found a job paying him $48,000 per year, paid at the beginning of each month. Her salary grows by 3% per year. She plans to work for 40 years and enjoy a retirement period of 30 years after that. Assume that the valuation rate is 2.4% per year. Part A: She decides to start saving for her retirement. If she starts by saving $2000 from her first salary and increase the saving by 2% per year, how much can she withdraw from her savings at the end of each month during retirement? Assume that she is aiming for a constant retirement income. Part B: What would happen if the salary payment and saving occur annually instead of monthly? Why? Only discuss it intuitively.
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