Albert has told you that one of his goals is to start his own business within three years. He has estimated that he will need $7,000 in five years to get his business off the ground. Based upon your research of historical, moderate investment returns you determine that Albert should reasonably be able to obtain a return of 5.5% per year over this timeframe. 1. How much does Albert need to deposit today in order to achieve this goal? Interest compounds annually on this investment. 2. Based upon Albert's liquidity, does he have enough currently saved to achieve this go red upon your analysis, Albert wonders if it might be better to put money away each mont ards this goal instead of molci
Albert has told you that one of his goals is to start his own business within three years. He has estimated that he will need $7,000 in five years to get his business off the ground. Based upon your research of historical, moderate investment returns you determine that Albert should reasonably be able to obtain a return of 5.5% per year over this timeframe. 1. How much does Albert need to deposit today in order to achieve this goal? Interest compounds annually on this investment. 2. Based upon Albert's liquidity, does he have enough currently saved to achieve this go red upon your analysis, Albert wonders if it might be better to put money away each mont ards this goal instead of molci
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 23P
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Transcribed Image Text:Albert has told you that one of his goals is to start his own business within three years. He has
estimated that he will need $7,000 in five years to get his business off the ground. Based upon
your research of historical, moderate investment returns you determine that Albert should
reasonably be able to obtain a return of 5.5% per year over this timeframe.
1. How much does Albert need to deposit today in order to achieve this goal? Interest
compounds annually on this investment.
2. Based upon Albert's liquidity, does he have enough currently saved to achieve this goal?
Based upon your analysis, Albert wonders if it might be better to put money away each month
towards this goal instead of making such a lump sum payment. Using the same information:
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