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Your client, Jeff, would like to have $500,000 in todays dollars 10 years from now for retirement. You mutually agree that inflation will stay constant
Your client, Jeff, would like to have $500,000 in todays dollars 10 years from now for retirement. You mutually agree that inflation will stay constant at 3% and you could achieve an average annual return of 10%. Jeff would like the investments to increase each year by inflation. How much would his first payment be if he invested at the end of each year? How much would his first payment be if he invested at the beginning of each year?
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