Problem
Refer to Example 8-9. Sanjay has 100 euros to spend before he flies back to the United States. He wishes to purchase jewelry priced at $160 (U.S.) in a duty-free shop at the airport. Euros can be bought for $1.32 and sold for $1.24. The owner of the duty-free shop tells Sanjay that the jewelry can be purchased for 100 euros plus $40 (U.S.). Is this a good deal for Sanjay? Explain your reasoning.
EXAMPLE 8-9
Saving to Meet a Retirement Goal Sara B. Goode wishes to retire in the year 2022 with personal savings of $500,000 (1997 spending power). Assume that the expected inflation rate in the economy will average 3.75% per year during this period. Sara plans to invest in a 7.5% per year savings account, and her salary is expected to increase by 8.0% per year between 1997 and 2022. Assume that Sara's 1997 salary was $60,000 and that the first deposit took place at the end of 1997. What percent of her yearly salary must Sara put aside for retirement purposes to make her retirement plan a reality?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.