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Suppose Professor Kate is in her last 3 years of work and she has no savings to date. Her post-tax annual income is $100000. She
Suppose Professor Kate is in her last 3 years of work and she has no savings to date. Her post-tax annual income is $100000. She wants her consumption to grow at 50% in each of the next three years and add the rest to her new investment portfolio, which has an expected rate of return of 6%. On her retirement, she wants to have $200000 in her portfolio. Which of the following is the amount she can consume in the first year?
a.) | The answer is 28089.99 |
b.) | The answer is 23845.60 |
c.) | The answer is 26580.60 |
d.) | The answer is 24155.10 |
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