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10. Nicky Darling is currently 30 years old and decides to start saving for her retirement....

10. Nicky Darling is currently 30 years old and decides to start saving for her retirement. Her current (annual) income is €30,000 and will grow at a constant rate of 2% annually until her retirement. She would like to save one quarter of her net income every year from next year onwards until she turns 65 (including that year). She agrees with the bank on annual interest rate compounding at an annualized interest rate of 4%. The final value of her savings account comes closest to:

A) €700,000 B) €725,000 C) €750,000 D) €775,000 Ans: C

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