Agnes is 40 years old. She wants to know how much she should be saving each year for retirement. Below are the specifics: She wants to retire at 60 and expects to live until she's 90 She currently makes $45,000 and expects that to increase each year with inflation (2%). She thinks she will need about 70% of that to live on in retirement. She has $40,000 in an RRSP Her investments are earning a real rate of 7% When she retires she will move her investments into a more conservative portfolio and earn 3% per year. She expects that CPP will be about $15,000 per year. How much will she have to save each year to make up the difference?
Agnes is 40 years old. She wants to know how much she should be saving each year for retirement. Below are the specifics: She wants to retire at 60 and expects to live until she's 90 She currently makes $45,000 and expects that to increase each year with inflation (2%). She thinks she will need about 70% of that to live on in retirement. She has $40,000 in an RRSP Her investments are earning a real rate of 7% When she retires she will move her investments into a more conservative portfolio and earn 3% per year. She expects that CPP will be about $15,000 per year. How much will she have to save each year to make up the difference?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 43P
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![Agnes is 40 years old. She wants to know how much she should be saving
each year for retirement. Below are the specifics: She wants to retire at 60
and expects to live until she's 90 She currently makes $45,000 and expects
that to increase each year with inflation (2%). She thinks she will need about
70% of that to live on in retirement. She has $40,000 in an RRSP Her
investments are earning a real rate of 7% When she retires she will move her
investments into a more conservative portfolio and earn 3% per year. She
expects that CPP will be about $15,000 per year. How much will she have to
save each year to make up the difference?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F954d7e5a-c5af-43c5-92da-d8e17d5e415d%2F4ab00ba7-e4b5-439a-bad2-8626b65335f2%2Fvh6zda6_processed.png&w=3840&q=75)
Transcribed Image Text:Agnes is 40 years old. She wants to know how much she should be saving
each year for retirement. Below are the specifics: She wants to retire at 60
and expects to live until she's 90 She currently makes $45,000 and expects
that to increase each year with inflation (2%). She thinks she will need about
70% of that to live on in retirement. She has $40,000 in an RRSP Her
investments are earning a real rate of 7% When she retires she will move her
investments into a more conservative portfolio and earn 3% per year. She
expects that CPP will be about $15,000 per year. How much will she have to
save each year to make up the difference?
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