Given
A1=50000N=25i=0.07g=0.05
therefore
P=A1[i−g1−(1+g)N(1+I)−N]P=50000[0.07−0.051−(1+0.05)25(1+0.07)−25]=940167.22
Benefit paid after 25 years
A=50000N=25i=0.07
Present value of retirement benefits
=50000(P/A,7%,25)=50000(11.654)=582700
Additional saving=940167.22−582700=357467
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