Question
You've recently graduated from the Chang school but have already started planning for your retirement. Your current job pays you $45,000/year and you expect this
You've recently graduated from the Chang school but have already started planning for your retirement. Your current job pays you $45,000/year and you expect this to increase by 5% annually. As part of your retirement plan you intend to make an annual deposit into an account starting on your 31st birthday (8% of $45,000) with the last contribution on your 65th. birthday, at which point you hope to retire. You expect to deposit 8% of your salary every year. If today is your 30th birthday then what is the present value of your retirement account if you assume it earns 7% per annum?
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