At age 37, Paul Li decides to plan for his retirement at age 67. He currently has a net worth of about $45,000 including the equity in his home. He assumes that his employer will contribute $3500 to his retirement plan at the end of each year for the next 30 years. He plans to put one-half of his money in a mutual fund containing stocks and the other one-half in a mutual fund containing bonds Estimate Li's net worth at age 67 if his net worth grows at 5% per year, his stock fund grows at 10% per year, and his bond fund grows at 6% per year.
At age 37, Paul Li decides to plan for his retirement at age 67. He currently has a net worth of about $45,000 including the equity in his home. He assumes that his employer will contribute $3500 to his retirement plan at the end of each year for the next 30 years. He plans to put one-half of his money in a mutual fund containing stocks and the other one-half in a mutual fund containing bonds Estimate Li's net worth at age 67 if his net worth grows at 5% per year, his stock fund grows at 10% per year, and his bond fund grows at 6% per year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:At age 37, Paul Li decides to plan for his retirement at age 67. He currently has a net worth of about
$45,000 including the equity in his home. He assumes that his employer will contribute $3500 to his
retirement plan at the end of each year for the next 30 years. He plans to put one-half of his money
in a mutual fund containing stocks and the other one-half in a mutual fund containing bonds
Estimate Li's net worth at age 67 if his net worth grows at 5% per year, his stock fund grows at 10%
per year, and his bond fund grows at 6% per year.
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