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Jennifer decides today, on her 23rd birthday to start saving towards her retirement so that she...

Jennifer decides today, on her 23rd birthday to start saving towards her retirement so that she would receive on her 63rd birthday a lump sum of $600,000 using today’s dollars.

  1. a- If she intends to make 160 equal quarterly, end-of-period deposits, what would be the amount of her quarterly deposits, in real dollars using today’s dollars? Assume a market interest rate of 2% per quarter and an inflation rate of 1.5% per quarter.

  2. b- If she intends to make 40 annual, end-of-year deposits that increase by $1,000 starting at the end of year 2, how much would her first deposit (i.e., at the end of year 1) be, in actual dollars? Assume a market interest rate of 10% per year and an inflation rate of 2% per year.

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