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Question: 1- A CE graduate begins working when she turns 25 at an annual salary of $62,000. She is promised raises of 3.5% per year every year. She palns to set aside 10% of her annul salary into a retirement plan (i.e., her first retirement set aside amount is $62,000x0.1=$6,200, the 2nd is $62,000x1.035x0.1=$6,417 and so on). She plans to work till her 60th birthday. How much she would have accumulated at retirement assuming that her retirement account makes an average annual ineterst of 2.5% per year (ignore inflation).

2- What is the annual pension she can afford drawing from this retirement account, starting on her 61st birthday, assuming she will live to turn 85?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92709833

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