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Question

A couple will retire in 50 years; they plan to spend about $30,000 a year in retirement, which should last about 25 years. They believe that they can earn 8% interest on retirement savings.

a. If they make annual payments into a savings plan, how much will they need to save each year? Assume the first payment comes in 1 year. b. How would the answer to part (a) change if the couple also realize that in 20 years they will need to spend$60,000 on their child’s college education?

Solution

VerifiedAnswered 1 year ago

Answered 1 year ago

Step 1

1 of 15In this problem, we are required to determine the total annual savings using the two different scenarios.

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