How much will you have at the end of the saving period

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Q1. You wish to set up a regular savings plan for your retirement in 20 years' time. Interest rates are currently 5% with long term inflation at 2%.You believe that interest rates will be at 4% in 2040 and your first payment will be in 2041. You wish to have an annual income of $70,000 in today's money from the pension and this should last for 15 years, growing at 1% each year. How much do you need to invest each year?

Q2. You will save $200 a month this year and increase this by 0.2% each month for the next 10 years. How much will you have at the end of the saving period if interest rates are 4.75%?

Reference no: EM132965267

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