You are currently 25 years old. You have developed a lifetime budget that includes (1) $50,000 at age 40 for a college fund for your kids and (2) $25,000 per year for 20 years to supplement your retirement, the first payment on your 60th birthday and the last payment on your 79th birthday. In order to fund these two, you open an investment account on your 25th birthday that promises to pay 9% interest compounded annually. And you're rich enough to make a one-time deposit on your 25th birthday and let it grow. How much do you need to deposit if you want to meet your financial goals?

You are currently 25 years old. You have developed a lifetime budget that includes (1) $50,000 at age 40 for a college fund for your kids and (2) $25,000 per year for 20 years to supplement your retirement, the first payment on your 60th birthday and the last payment on your 79th birthday. In order to fund these two, you open an investment account on your 25th birthday that promises to pay 9% interest compounded annually. And you're rich enough to make a one-time deposit on your 25th birthday and let it grow. How much do you need to deposit if you want to meet your financial goals?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 34P

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