Chapter 5, Problem 30P

a.

Summary Introduction

To calculate: Number of years taken by E and K to become millionaires, if both earn same return.

Financial Goal: Financial goal is a money based target, which a person wants to achieve at a certain age. It requires making plan for reducing debt, creating enough wealth to have at the time of retirement and reducing amount of tax.

b.

Summary Introduction

To calculate: E’s contribution to become millionaire at the same age of K.

c.

Summary Introduction

To explain: Whether it is rational or irrational for E to invest in the bond fund rather than in stocks.