Question

8. Assume you just turned 28. You want to accumulate $3.5 million by your 65th birthday. Beginning next year, you will invest equal amounts each year until your 60th birthday. Your twin brother has the same goal, but he will wait 4 years before making his first payment. Assume he also will make equal payments into the same mutual fund until his 60th birthday. If both accounts earn a 12.5% annual rate of return, how much more will your brother have to invest each year (relative to you) in order to have the same $3.5 Million at age 65?