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Sarah wants to start her own business in 10 years. She needs to accumulate $200,000 (today's dollars) in 10 years to sufficiently start her business
Sarah wants to start her own business in 10 years. She needs to accumulate $200,000 (today's dollars) in 10 years to sufficiently start her business She assumes that intlation will average 4%, and that she can cam a 9% compound annual after-tax return on her investments. Sarah wants to inerease her annual saving with inflation adjustment. What will Sarah's payment be at the end of the second year? Part A: What is annual cqual saving? Part B: They will increase their savings annually at the rate of inflation. How much should they save at the end of year 2 ? Part C: They will increase their savings annually at the rate of inflation. How much should they save at the beginning of year 2 ? Sarah wants to start her own business in 10 years. She needs to accumulate $200,000 (today's dollars) in 10 years to sufficiently start her business She assumes that intlation will average 4%, and that she can cam a 9% compound annual after-tax return on her investments. Sarah wants to inerease her annual saving with inflation adjustment. What will Sarah's payment be at the end of the second year? Part A: What is annual cqual saving? Part B: They will increase their savings annually at the rate of inflation. How much should they save at the end of year 2 ? Part C: They will increase their savings annually at the rate of inflation. How much should they save at the beginning of year 2
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