Suppose you have an account that will grow to $253,000.00 in 25 years. It grows at 7.5% annual interest, compounded monthly, under the current investment strategy. The owner of the account, however, wants it to have $368,000.00 after 25 years. How much additional monthly contribution should they make to meet their goal?
Suppose you have an account that will grow to $253,000.00 in 25 years. It grows at 7.5% annual interest, compounded monthly, under the current investment strategy. The owner of the account, however, wants it to have $368,000.00 after 25 years. How much additional monthly contribution should they make to meet their goal?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 34P
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Suppose you have an account that will grow to $253,000.00 in 25 years. It grows at 7.5% annual interest, compounded monthly, under the current investment strategy. The owner of the account, however, wants it to have $368,000.00 after 25 years. How much additional monthly contribution should they make to meet their goal?
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Future value is the value of future cash flow at a certain period after applying a discount rate, whereas present value is the predicted current value of future cash flow.
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