Your friend is celebrating her 25th birthday today and wants to start saving for her

anticipated retirement at age 65 (she will retire on her 65th birthday). She would like to

be able to withdraw $120,000 from her savings account on each birthday for at least 20

years following her retirement (the first withdrawal will be on her 66th birthday). Your

friend intends to invest her money in the local savings bank which offers 4 percent per

year. She wants to make equal annual deposits on each birthday in a new savings

account she will establish for her retirement fund.

If she starts making these deposits on her 26st birthday (one year from today) and

continues to make deposits until she is 65 (the last deposit will be on her 65th birthday),

what amount must she have accumulated in her savings account when she makes the

final deposit on her 65th birthday in order to make the desired withdrawals upon

retirement?

Select one:

a. $1,630,839.61

b. $2,307,692.31

c. $2,143,578.49

d. $1,861,547.81