Problem
Dylan wants to retire 10 years ?om now. He plans on saving $125,000 each year until he retires. He will invest his savings in government securities because he wants a risk-free investment until retirement. U.S. Treasuries are expected to have a return of 3% per year for the next 10 years. Once he retires, he will take the amount that he has saved and invest it in a pension ?md. In retirement, he would like an annual income of $100,000 per year for 25 years. What annual IRR does his pension ?md need to achieve over the 25 years that he is retired in order to afford his retirement plan?