your bank interest much should you raise your product prices? REACHING A FINANCIAL GOAL Shan Chen and Shan Xia, who are twins, 5-33 just received $30,000 each for their 25th birthday. They both have aspira- tions to become millionaires. Each plans to make a $5,000 annual contri- bution to her "early retirement fund" on her birthday, beginning a year from today. Shan Chen opened an account with the Asiana Regional Rod Fund, a mutual fund that invests in high-quality bonds whose inves. tors have earned 6% per year in the past. Shan Xia invested in the Firc Renewable Tech Fund, which invests in small, newly issued bio-tech stocks and whose investors have earned an average of 20% per year in the fund's relatively short history. If the two women's funds earn the same returns in the future as in the past, how old will each be when she becomes a millionaire? b. How large would Shan Chen's annual contributions have to be for her to become a millionaire at the same age as Shan Xia, assuming d. their expected returns are realized? Is it rational or irrational for Shan Chen to invest in the bond fund C. rather than in stocks