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You are planning to save $1.4million for retirement over the next 34 years. (a)...

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Finance

You are planning to save $1.4million for retirement over the next 34 years.

(a) If you are earning interest at the rate of 6% and you live 25 years after retirement, what annual level of living expenses will those savings support?

(b) Suppose your retirement living expenses will increase at an annual rate of 3% due to inflation. Determine the annual spending plan for the first year of retirement in line with your inflation.

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