Chapter 1, Problem 2FPC

Victor and Maria Hernandez Look at Future Income

Throughout this book, we will present a continuing narrative about Victor and Maria Hernandez. Following is a brief description of the lives of this couple. Victor and Maria, both in their late 30s, have two children: Jacob, age 13, and Nicholas, age 15. Victor has had a long sales career with a retail appliance store in Fargo, North Dakota earning $53,000 annually. Maria community newspaper, from which they earn about $4,000 each year. What is the accumulated future value of those amounts over 20 years if the annual earnings were invested regularly and provided a 5 percent return each year? (Hint: Use Appendix A.3.)

What would Victor and Maria’s annual income be after 20 years if they both received an average 3 percent raise over their current $85,000 salary ($53,000 1 $32,000) every year? (Hint: Use Appendix A.1.) works as a medical records assistant earning $32,000.

1. Victor and Maria regularly buy and sell a number of items on eBay, Craig’s List, and through the free community newspaper, from which they earn about $4,000 each year. What is the accumulated future value of those amounts over 20 years if the annual earnings were invested regularly and provided a 5 percent Return each year? (Hint: Use Appendix A.3.)
2. What would Victor and Maria’s annual income be after 20 years if they both received an average 3 percent raise over their current $85,000 salary ($53,000 1 $32,000) every year? (Hint: Use Appendix A.1.)