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Unformatted text preview: retires and so is planning to start a retirement plan. Janet expects to contribute $3000 at the end of year 1 and her contribution into the plan to increase by 1% each year. She plans on retiring at the age of 65 (so she expects to make contributions into the plan for 35 years). The pension plan is expected to generate a return of 8% each year. She comes from a family blessed with long lives and so she is expecting to live for 25 years after she retires. The pension plan that she is looking into offers a deal where the sum-total of the retirement money can be turned into an annuity that lets her withdraw the lump-sum she has at the time of retirement over 25 equal installments if she agree to a return of 5% each year. What will Janet be able to get each year starting with her 66 th birthday till her 90 th birthday?...
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This note was uploaded on 04/05/2011 for the course FIN 320 taught by Professor Yatin during the Winter '07 term at Grand Valley State University.
- Winter '07