Suppose Annie’s current salary is $65,000 per year, and she is planning to retire 25 years from now. She anticipates that her annual salary will increase by $1,800 each year. That is in the first year she will earn $65,000 in the second year $66,800 in the third year $68,600 and so forth. At the end of each of the next 25 years, she plans to deposit 10% of her salary from that year into a retirement fund that earns 6% interest compounded daily. How much money will be in her account at the time of her retirement.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
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Suppose Annie’s current salary is $65,000 per year, and she is planning to retire 25 years from now. She anticipates that her annual salary will increase by $1,800 each year. That is in the first year she will earn $65,000 in the second year $66,800 in the third year $68,600 and so forth. At the end of each of the next 25 years, she plans to deposit 10% of her salary from that year into a retirement fund that earns 6% interest compounded daily. How much money will be in her account at the time of her retirement.
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