John starts his career at 21 years old and expects to retire 44 years later at...

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John starts his career at 21 years old and expects to retire 44years later at the age of 65. His first annual salary is $72,000that will increase at 1.5% per year until he finishes his part-timeMBA at 28 years old. With his MBA, John expects salary to increaseat 3% per year until retirement. At the end of each year, hedeposits 10% of his annual salary into a retirement saving planthat pays 6% interest per year compounded monthly. On the first dayof his retirement, John converts his whole retirement saving planinto a registered retirement income fund (RRIF) that earns 8%interest per year compounded quarterly. The RRIF will pay John $Yper quarter, the first payment being paid on the day he buys theRRIF, for 25 years. Find Y. (Show your work withoutusing MS Excel)

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There are two streams of annuity involved here First stream from age 21 to 28 when Annuity 10 of salary First annuity A 10 x 72000 7200 Growth rate in annuity g 15 EAR interest rate i 6 compounded monthly 1 6 1212 1 617 n 28 21 7 years Hence FV of this annuity at the end when he is 28 See Answer

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John starts his career at 21 years old and expects to retire 44years later at the age of 65. His first annual salary is $72,000that will increase at 1.5% per year until he finishes his part-timeMBA at 28 years old. With his MBA, John expects salary to increaseat 3% per year until retirement. At the end of each year, hedeposits 10% of his annual salary into a retirement saving planthat pays 6% interest per year compounded monthly. On the first dayof his retirement, John converts his whole retirement saving planinto a registered retirement income fund (RRIF) that earns 8%interest per year compounded quarterly. The RRIF will pay John $Yper quarter, the first payment being paid on the day he buys theRRIF, for 25 years. Find Y. (Show your work withoutusing MS Excel)