1)Given that an individuals current age is 30 years and he receives income of $25,000...
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Finance
1)Given that an individuals current age is 30 years and he receives income of $25,000 annually. That will continue till the age of 60(his retirement age). He wants to save from his stream of income so he would continue to have a targeted consumption pattern (80% of his income) till the age of 80. Further, we assume that he possessed no earlier wealth and zero taxes.
a)Find: How much should he save each year till his retirement age
b) Find: The amount he should have in his account at the time of retirement
(Please answer in details with omulae mention. The question is from financial economics life cycle model of saving)
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