Imagine you are a financial advisor to Janet Jones. Ms. Jones wants to retire in 20 years. She expects to live for another 15 years after she retires. During retirement she wants to withdraw $12,000 at the start of each year from a savings account.
1. How much will she have to deposit in this savings account at the end of each year for the next 20 years, if the interest rate is 10%, compounded annually?
2. How would the yearly deposits be changed if Ms Jones expects her cat to live for another five years after her death, and she wants to leave an amount in an account that will be used to pay the cat sitter $6000 at the start of each year, for those five years.
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