Answer:
annual sum must he set aside $16209.42
Explanation:
given data
engineer wishes = $3 million
retires time = 35 years
nominal interest = 8%
solution
we get here effective annual rate that is
interest rate = [tex]e^{r} - 1[/tex] ...........1
interest rate = [tex]e^{0.08} - 1[/tex]
interest rate = 0.08328 = 8.33%
and
now we get annual sum must he set aside that is
amount = $3 million × [tex]\frac{rate}{(1+rate)^{t}-1}[/tex]
amount = $3000000 × [tex]\frac{0.0832}{(1+0.0832)^{35}-1}[/tex]
amount = $16209.42
