Problem:
A self-employed person deposits $3,000 annually in a retirement account that earns 8 percent.
Required:
Question 1: How much will be in the account when the individual retires at the age of 65 if the savings program starts when the person is age 40?
Question 2: How much additional money will be in the account if the saver defers retirement until age 70 and continues the contributions?
Note: Show supporting computations in good form.