Jack is 23 years old. He earns $1,800 fortnightly after tax from his full-time job. He estimates that he will need to have $4.5 million by the time he retires at 65 years old in order to live comfortably. So, he starts planning for his retirement by saving a third of his income and investing it fortnightly in a pension plan that yields a return of 7.5% per year. Assuming his fortnightly income and the pension plan’s return stay the same until he retires, can he reach his retirement goal? (Note: there are 52 weeks in a year). You must show your calculations or your inputs to Excel or financial calculator.
Jack is 23 years old. He earns $1,800 fortnightly after tax from his full-time job. He estimates that he will need to have $4.5 million by the time he retires at 65 years old in order to live comfortably. So, he starts planning for his retirement by saving a third of his income and investing it fortnightly in a pension plan that yields a return of 7.5% per year. Assuming his fortnightly income and the pension plan’s return stay the same until he retires, can he reach his retirement goal? (Note: there are 52 weeks in a year). You must show your calculations or your inputs to Excel or financial calculator.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 42P
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Jack is 23 years old. He earns $1,800 fortnightly after tax from his full-time job. He estimates that he will need to have $4.5 million by the time he retires at 65 years old in order to live comfortably. So, he starts planning for his retirement by saving a third of his income and investing it fortnightly in a pension plan that yields a return of 7.5% per year. Assuming his fortnightly income and the pension plan’s return stay the same until he retires, can he reach his retirement goal? (Note: there are 52 weeks in a year). You must show your calculations or your inputs to Excel or financial calculator.
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