In this section's Application Preview, we considered the investment strategies of twins and found that starting early and stopping was a significantly better strategy than waiting, in terms of total contributions made as well as total value in the account at retirement.
Suppose now that twin 1 invests $2000 at the end of each year for 10 years only (until age 33) in an account that earns 8%, compounded annually. Suppose that twin 2 waits until turning 40 to begin investing. How much must twin 2 put aside at the end of each year for the next 25 years in an account that earns 8% compounded annually in order to have the same amount as twin 1 at the end of these 25 years (when they turn 65)?