You are saving for your expected retirement at age 68 -- forty-eight years from today. You plan to invest $2,000 per year, in arrears, for the next forty-eight years and earn 5% per year.
a. How much would you have accumulated after making your 48th and final payment?
b. Because of school loans, furnishing your apartment, saving for a down payment on a condo, etc., you decide to wait twelve years to begin your retirement savings. How much would you have to invest for each of the remaining thirty-six years to accumulate the same amount as in part a if you still earned five percent per annum?