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Retirement planning. Both John and Jane have $10,000 which they will contribute to their new RRSPs on their 31 st birthdays. From then on, they
Retirement planning.
Both John and Jane have $10,000 which they will contribute to their new RRSPs on their 31st birthdays. From then on, they will contribute to their RRSPs until they are each 71. John and Jane will receive their first payments on their (respective) 71st birthdays. Each wish to receive a payment of $10,000 per month until they die. Supposing that their RRSPs earn 12% compounded monthly, what is Johns monthly contribution if he plans to live until 91? Similarly, what is Janes monthly contribution if she plans to live until 101?
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