Question
Sabrina Smith, a leading actress, is 23 years old today and is beginning to plan for her retirement. One of the many investments she is
Sabrina Smith, a leading actress, is 23 years old today and is beginning to plan for her retirement. One of the many investments she is considering is putting aside an equal amount at the end of each of the next 25 years so that she can retire at age 58. She expects to live to the maximum age of 78 and wants to be able to withdraw $25,000 per year from the account on her 59th through 78th birthdays. The account is expected to earn 12 percent per year for the entire period of time. Determine the size of the annual deposits that must be made by Sabrina.
A) $1,400
B) $2,001
C) $2,164
D) $1,033
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