FINANCE CH6 Question 9 (of 9) value 10.00 points You have 32 years left until re

Question

FINANCE CH6 Question 9 (of 9) value 10.00 points You have 32 years left until retirement and want to retire with $3 3 million Your salary is paid a you will receive $46. nnually, and at the end of the current year Your salary will increase at 2.1 percent per year, and Do not round intermediate 000 you can earn a 15.1 percent return on the money you invest. If you save a constant percentage salary, what percentage of your salary must you save each year? ( calculations and round your final answer to 2 decimal places. (e.g., 32.16) Percent of salary to save References eBook & Resources Worksheet Difficulty: Challenge F2

Explanation / Answer

let the proportion of salary saved be x
x*(46000*1.151^31+46000*1.021*1.151^30...........)=3300000
=>x*46000*1.151^31*(1-(1.021/1.151)^32)/(1-(1.021/1.151))=3300000
=>x=0.10587=10.587%

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