You just finished your degree, and you have two job offers. The first one offers you 75,000, paid at the end of the year, with expected annual increases of 4.5% thereafter. The second one offers you 80,000, paid at the end of the year, with expected annual increases of 3.5% thereafter. The appropriate discount rate is 7%. Ignore taxes.

Part A: Which offer is more valuable if you expect to retire in 45 years?

Part B: In both cases, you estimate that you will retire in 45 years. Suppose in each case you save 20% of your annual salary in a retirement account earning 7% annually compounded return. From this account, you expect to withdraw equal annual amounts (in nominal terms) for 20 years after you retire (your ending balance will be 0 at that time). How much would you have in your account when you retire? What is the amount of the annual withdrawal under each offer?