Question

Mary’s starting salary as an Industrial Engineer is $55000. She is planning to place a total of 5% of her salary each year in a mutual fund (which is an investment program). She expects a 3% salary increase each year for the next 30 years of employment. If the mutual fund will have 9% annual return over the course of her career, what can Mary expect at retirement (i.e. after 30 years)?

Her first payment happens one year from now.

Note: assume the total amount of salary (for each year) is received at the end of that year.

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Answer 1

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