Question: Retirement Problem. (ONLY SOLVE E or e) A client met with a financial consultant to figure out how much she will need to save in
Retirement Problem. (ONLY SOLVE E or e)
A client met with a financial consultant to figure out how much she will need to save in order to secure her retirement. There are several scenarios that the financial planner will consider.
a) In exchange of getting paid $30,000 for 8 years starting the beginning of year 6 (i.e., she will get paid $30,000 in the beginning of year 6, 7, and so on for 8 years), she agrees to set aside $x for 5 years, starting now (beginning of year 1, 2, 3, 4, 5). The interest rate is 8%. What is $x?
e) Now, assume that everything is the same as in a) except that all payments are made at the end of each year (and not beginning of each year as above), calculate $x.
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