S
sfischer
Member
In Que 12.7, we are told that the woman's salary increases by 6% each year and the interest on the fund is 8% each year. I would have assumed that the accumulation after 15 years is simply 1500+1500*1.06*1.08+.... However, the answer discounts back with the rate of 1.06/1.08 (as if 8% was a kind of inflation rate and we were asked for a real rate of return) and then accumulates at 8%. I am missing the logic here - thanks.