(a)
The amount of money invested each year.
Answer to Problem 1P
The amount of money invested each year is
Explanation of Solution
Given:
Annual income is
Number of year is
Calculation:
Write the expression for future value.
Here, the future value is
The interest rate for stock fund is
Substitute
Conclusion:
Thus, the amount of money invested each year is
(b)
The amount of money each should invest annually.
Answer to Problem 1P
The amount invested by the employer annually is
The amount invested by the employee annually is
Explanation of Solution
Given:
Annual income is
Number of year is
Future Value is
Saving is
Calculation:
Calculate the amount contributed each year by the employer.
Calculate the amount invested by the employer.
Here, the annual amount to be invested is
Substitute
Conclusion:
Thus, the amount invested by the employer annually is
The amount invested by the employee annually is
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