How much money could she expect to have accumulated

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Reference no: EM133454283

Case Study: Lynn Price recently completed her MBA and accepted a job with an electronics manufacturing company. Although she likes her job, she is also looking forward to retiring one day. To ensure that her retirement is comfortable, Lynn intends to invest $3,000 of her salary into a tax-sheltered retirement fund at the end of each year. Lynn is not certain what rate of return this investment will earn each year, but she expects each year's rate of return could be modeled appropriately as a normally distributed random variable with a mean of 12.5% and standard deviation of 2%. Please use ASP solver to answer the following questions:

Questions:

If Lynn is 30 years old, how much money should she expect to have in her retirement fund at age 60?
Construct a 95% confidence interval for the average amount Lynn will have at age 60.
What is the probability that Lynn will have more than $1 million in her retirement fund when she reaches age 60?
Suppose that Lynn contributes $3,000 annually to her retirement fund for eight years and then terminates these annual contributions. How much of her salary would she have contributed to this retirement plan and how much money could she expect to have accumulated at age 60?
Now suppose that Lynn contributes nothing to her retirement fund for eight years and then begins contributing $3,000 annually until age 60. How much of her salary would she have contributed to this retirement plan and how much money could she expect to have accumulated at age 60?

Reference no: EM133454283

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