Use of Financial Calculator TI BA II Plus required. Arnie is 21 years old and earning $75 000 annually. If inflation averages three percent annually over his career, what will he have to earn at age 60 to equal his current pay?

Question

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1. Press the "2nd" button, then "CE/C" to clear previous calculations.
2. Enter "N" as the number of years until Arnie reaches age 60: 60 - 21 = 39.
3. Enter "I/Y" as the annual inflation rate: 3.
4. Enter "PV" as the present value of Arnie's current salary: -75000 (negative because it's an outflow).
5. Press the "CPT" button and then "FV" to calculate the future value needed at age 60.
6. The answer is $237,527.

Use of Financial Calculator TI BA II Plus Required