SARA,DANI and RACHEL’S ADVENTURE WITH FINANCES Sara, Dani and Rachel are triplets. Their grandparents decided to set up a trust for each of them that would pay out $3,000 each year, starting when they...

SARA,DANI and RACHEL’S ADVENTURE WITH FINANCES Sara, Dani and Rachel are triplets. Their grandparents decided to set up a trust for each of them that would pay out $3,000 each year, starting when they turned 20, and would continue until they were 65. Although the triplets appeared to have similar tastes, they had different perspectives on investing money. Sara learned at an early age to be concerned about her future and became fiscally conservative, investing her trust funds each year in a savings program earning 6% interest compounded annually until she turned 65. She delayed vacations until she secured a job and could afford vacations out of her own salary. Dani was concerned about her future as well, so she also invested her trust funds of $3000 each year in a savings program earning 6% interest compounded annually. However, Dani decided after 10 years, at age 30, to stop investing the $3000. Instead she started to spend the $3000 on vacations skiing in Utah each year and she continued to do this until she turned 65. Although she stopped making additional deposits each year into her trust fund, she never withdrew the money and allowed the balance to stay in the account and earn 6% interest compounded annually. Rachel loved to play and thought that life was too short to be overly concerned about saving for the future. For 20 years, she spent her annual trust fund on vacations in Hawaii. At age 40, she began to realize that there might come a day where she might not be able to work and would need funds to support herself. She began to invest her annual funds in a savings program earning 6% compounded annually. She continued to do this until she turned 65. Although the triplets were close, they never discussed finances until their joint 65th birthday party. They began to compare their retirement plans. Each sister was proud of her savings and showed the others a spreadsheet describing her savings plans and accumulations. Let’s see what happened with each of the retirement/savings plans.