1. a. Inflation is expected to average four percent for the long term and Mr. Smith earned $50,000 this year. How much must he earn in 20 years just to keep up with inflation and maintain the balance between his income and his increasing expenditures?
b. Jamie wants to have $2,000,000 for her retirement in 25 years. How much should she save annually if she thinks she can earn 10 percent on her investments?
c. The Flemings will need $100,000 annually for 20 years during retirement. How much will they need at retirement if they can earn a four percent rate of return?
d. The Hamptons want to have $3,500,000 for their retirement in 30 years. How much should they save annually if they think they can earn eight percent on their investments?