Question: A 25-year old engineer is opening an individual retirement account (IRA) at a bank. Her goal is to late $1 million in the account by

A 25-year old engineer is opening an individual retirement account (IRA) at a bank. Her goal is to late $1 million in the account by the time she retires from work in 40 years. The bank manager estimates she may expect to receive 8% nominal annual interest, compounded quarterly, throughout the 40 years. The engineer believes her income will increase at a 7% annual rate during her career. She wishes to start with as Iowa deposit as possible to her IRA now and increase it at a 7% rate each year. Assuming end-of- year deposits, how much should she deposit the first year?

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