Problem:
You have 39 years left until retirement and want to retire with $3.7 million. Your salary is paid annually, and you will receive $54,000 at the end of the current year. Your salary will increase at 4.2 percent per year, and you can earn a 12.2 percent return on the money you invest.
Required:
Question: If you save a constant percentage of your salary, what percentage of your salary must you save each year?
Note: Provide support for your rationale.