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What is the real amount of saving that you need

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Reference no: EM133175191

Question - a. You plan to retire in 40 years and want to accumulate enough by then to have $40,000 per year for 20 years. If the interest rate is 8%, how much must you accumulate by the time you retire?

b. How much must you save each year until retirement in order to finance your retirement consumption?

c. You really want to consume $40,000 a year in real dollars during retirement and wish to save an equal real amount each year until then, if the expected annual inflation rate is 3%. What is the real amount of saving that you need to accumulate by the time you retire?

Reference no: EM133175191

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