Trudy would like to help her only daughter Vanessa save for a down payment on a home.Vanessa is currently 20 years old and is renting an apartment close to her workplace.Trudy began the savings plan with $10,000 now, which has been placed into a non-registered account for Vanessa.She plans on giving Vanessa $40,000 in real dollars in 5 years. The financial institution account where the funds are invested provide for a nominal return of 6.50% p.a. before tax (in a non-registered account).Her marginal tax rate is 40% and inflation is 2%

a)How much must she save at the beginning of each year to ensure she will have the amount for Vanessa as planned? Hint: Calculate using real dollars and real rates.

after tax nominal rate =6.50(1-0.40)=3.90

real rate =(1.039/2.02)-1 =1.8627

the payment =

pv=10,000

i/y=1.8527

n=5

fv= -40,000 then payment = 5594.33 is this correct

b)As savings are done in nominal dollars, provide Trudy with a savings schedule for each year.

how would calculate the savings per year in nominal dollars