The following investment calculations will help you prepare for your retirement, and help you determine how much money you will need at retirement, and what steps you need to take to get there.
- Use future or present value techniques to solve the following problems:
(Note: You can use tables or a financial calculator. If you use a calculator, please provide the inputs you used to solve the problems)
a. Starting with $20,000, how much will you have in 20 years if you can earn five percent on your money?
b. If you inherited $100,000 today and invested all of it in a security that paid a eight percent rate of return, how much would you have in 15 years?
c. If the average new home costs $200,000 today, what will be the value in 10 years if inflation is four percent per year?
d. If you can earn nine percent per year, how much will you have to save each year if you want to retire in 40 years with $3 million?
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