2. Had Jason taken advantage of the company's voluntary retirement plan up to the maximum every year for the past five years, how much money would he currently have accumulated in his retirement account, assuming a nominal rate of return of 7 percent, compounded annually? How much more would his investment value have been worth had he opted for a higher risk alternative (i.e., 100% in common stocks), which was expected to yield an average compound rate of return of 12 percent, compounded annually? HINT: Provide your answer in real dollars by calculating the real rate of return using a 3 percent rate of inflation.

Fig: 1