Your friend is celebrating her 24th birthday today and wants to start saving for her anticipated...

 

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Your friend is celebrating her 24th birthday today and wants to start saving for her anticipated retirement at age 65. She estimates that the annual spending needs would be $320,000 based on the current price level, and inflation rate is expected to be (3% +0.1% x Y) per year. She wants to be able to make withdrawal for spending needs on each year for 20 years following her retirement; the first withdrawal will be on her 66th birthday. Your friend intends to invest her money in a fund, which offers percent interest per year after retirement. Before retirement, your friend invests in stock funds, which offers 10% interest per year. Suppose your friend's employee will contribute equal amount to the account every year. In addition, your friend expects to spend $250,000 for her wedding on her 36th birthday. She will get the $200,000 annual salary in 25th birthday, and the salary is expected to be increase at 5%. Your friend is celebrating her 24th birthday today and wants to start saving for her anticipated retirement at age 65. She estimates that the annual spending needs would be $320,000 based on the current price level, and inflation rate is expected to be (3% +0.1% x Y) per year. She wants to be able to make withdrawal for spending needs on each year for 20 years following her retirement; the first withdrawal will be on her 66th birthday. Your friend intends to invest her money in a fund, which offers percent interest per year after retirement. Before retirement, your friend invests in stock funds, which offers 10% interest per year. Suppose your friend's employee will contribute equal amount to the account every year. In addition, your friend expects to spend $250,000 for her wedding on her 36th birthday. She will get the $200,000 annual salary in 25th birthday, and the salary is expected to be increase at 5%.

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