Georgia McBeal is trying to save for her retirement.She believes she can earn 10% on average each yearon her retirement fund.
Assume that at the beginningof each of the next 40 years, Georgia will allocate xdollars to her retirement fund.
If at the beginning of ayear Georgia has y dollars in her fund, by the end ofthe year, it will grow to 1.1y dollars.
• How muchshould Georgia allocate to her retirement fund eachyear to ensure that she will have $1 million at the endof 40 years?
• What key factors are being ignored in thisanalysis of the amount saved for retirement?