Question: The stock reply from the answer guide says SPREADSHEET PROVIDED. There's no spreadsheet answer available. Please help, I'm not understanding this at all. Thanks. 3.19

The stock reply from the answer guide says "SPREADSHEET PROVIDED". There's no spreadsheet answer available. Please help, I'm not understanding this at all. Thanks.

3.19 - Suppose that in a certain defined benefit pension plan

(a) Employees work for 45 years earning wages that increas at a real rate of 2%.

(b) They retire with a pension equal to 70% of their final salary.This pension increases at the rate of inflation minus 1%.

(d) The pension fund's income is invested in bonds that earn the inflation rate plus 1.5%.

Estimate the percentage of an employee's salary that must be contributed to the pension plan if it is to remain solvent.

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