Problem 44 is not very realistic because most retirement plans do not allow you to specify a

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Problem 44 is not very realistic because most retirement plans do not allow you to specify a fixed amount to contribute every year. Instead, you are required to specify a fixed percentage of your salary that you want to contribute. Assume that your starting salary is $75,000 per year and it will grow 2% per year until you retire. Assuming everything else stays the same as in Problem 44, what percentage of your income do you need to contribute to the plan every year to fund the same retirement income.


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Corporate Finance

ISBN: 978-0133097894

3rd edition

Authors: Jonathan Berk and Peter DeMarzo

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