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Caroline has just turned 22 and has begun her rst job. Her rst years salary...

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Accounting

Caroline has just turned 22 and has begun her rst job. Her rst years salary is $60,000 per year, which is paid monthly ($5,000 per month). For planning purposes: (1) Her future annual salary will grow at a rate of 4% per year. (2) She will work for 40 years and retire on her 62nd birthday. (3) She will receive a pension payment each year for 30 years beginning on her 62nd birthday. (4) Accounting for ination, her rst pension payment should be $150,000. (5) Her pension payments should increase at a rate of 2.5% per year. (6) She has decided to withdraw 100p% from her monthly paycheck. (7) She wants to use a 6% EAR as an appropriate interest rate. What is the minimum value for p (to the nearest whole percent) to fund Carolines plan? Ignore taxes for this analysis.

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