a. How much would Phoebe have to invest today, in one lump sum, to end up with $45,000 in seven years? Round the answer to two decimal places. b. If she's starting from scratch, how much would she have to put away annually to accumulate the needed capital in seven years? Round the answer to two decimal places. $ c. How about if she already has $5,000 socked away, how much would she have to put away annually to accumulate the required capital in seven years? Round the answer to two decimal places. d. Given that Phoebe has an idea of how much she needs to save, briefly explain how she could use an investment plan to help reach her objective.
a. How much would Phoebe have to invest today, in one lump sum, to end up with $45,000 in seven years? Round the answer to two decimal places. b. If she's starting from scratch, how much would she have to put away annually to accumulate the needed capital in seven years? Round the answer to two decimal places. $ c. How about if she already has $5,000 socked away, how much would she have to put away annually to accumulate the required capital in seven years? Round the answer to two decimal places. d. Given that Phoebe has an idea of how much she needs to save, briefly explain how she could use an investment plan to help reach her objective.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:1. Ch11 Financial Planning Exercise 1
BE
eBook
Chapter 11
Financial Planning Exercise 1
Calculate amount to invest to meet objectives
Use Worksheet 11.1. Phoebe Jones is now employed as the managing editor of a well-known business journal. Although she thoroughly enjoys her job and the people she works with, what she would really like to do is open a bookstore of her own. She would like to open her store
in about seven years and figures she'll need about $ 45,000 in capital to do so. Given that Phoebe thinks she can make about 7 percent on her money, use Worksheet 11.1 to answer the following questions.
a. How much would Phoebe have to invest today, in one lump sum, to end up with $45,000 in seven years? Round the answer to two decimal places.
$
b. If she's starting from scratch, how much would she have to put away annually to accumulate the needed capital in seven years? Round the answer to two decimal places.
$
c. How about if she already has $5,000 socked away, how much would she have to put away annually to accumulate the required capital in seven years? Round the answer to two decimal places.
$
d. Given that Phoebe has an idea of how much she needs to save, briefly explain how she could use an investment plan to help reach her objective.
li
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