Felix is keen to apply his finance knowledge to his real-life investment goals. He is currently 19 years of age and wishes to retire from full-time work at the age of 60 with $5 000 000 in his portfolio. He started contributing monthly to a NASDAQ index fund. a) How much will Felix need to contribute at the end of each month in order to receive $5 000 000 at the age of 60 at a compound return of 8.50% p.a.? Show formula, variables, calculation and a concluding statement in your response. b) How much will Felix need to contribute at the start of each month in order to receive $5 000 000 at the age of 60 at a compound return of 8.50% p.a.? Show formula, variables, calculation and a concluding statement in your response. c) Explain why there is a difference between the two amounts determined in parts a) and b) above.
Felix is keen to apply his finance knowledge to his real-life investment goals. He is currently 19 years of age and wishes to retire from full-time work at the age of 60 with $5 000 000 in his portfolio. He started contributing monthly to a NASDAQ index fund.
a) How much will Felix need to contribute at the end of each month in order to receive $5 000 000 at the age of 60 at a compound return of 8.50% p.a.?
Show formula, variables, calculation and a concluding statement in your response.
b) How much will Felix need to contribute at the start of each month in order to receive $5 000 000 at the age of 60 at a compound return of 8.50% p.a.?
Show formula, variables, calculation and a concluding statement in your response.
c) Explain why there is a difference between the two amounts determined in parts a) and b) above.
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