Problem

A newly employed engineer decides to place 5% of her salary every year into a retirement a...

A newly employed engineer decides to place 5% of her salary every year into a retirement account. Her first year salary is $45,000, and it is anticipated that her real salary (after removing the effect of inflation) will increase 3% per year. What will be in the account at the end of year 30 if annual interest earned on the account is

(a) 5%

(b) 3%

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