Suppose Josh’s current salary is $72, 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 $72, 000 in the second year $73, 800 in the third year $75, 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? Use factor method and show cash flow diagram
Suppose Josh’s current salary is $72, 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 $72, 000 in the second year $73, 800 in the third year $75, 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? Use factor method and show cash flow diagram
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 16PROB
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Suppose Josh’s current salary is $72, 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 $72, 000 in the second year $73, 800 in the third year $75, 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? Use factor method and show cash flow diagram
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