Future values always grow larger the longer an investment is held. But do they grow proportionately larger? For example, if you hold an investment for 40 years, do you earn twice as much as you would if you hold it for 20 years? Discuss.
Answer to relevant QuestionsWhat is an annuity? What is meant by the future value of an annuity? You can invest $40,000 today toward your eventual retirement that will earn 14 percent interest over the period. You want to have $500,000 at the retirement date. How many years away from retirement are you? You can invest $3,000 annually at the end of each of the next 12 years. You hope to have $60,000 in the investment account by then. What rate of interest must you earn to meet this goal? Explain the difference between a current and a noncurrent liability. Give an example of each. Explain whether liability amounts are difficult or easy to determine. Explain how you would forecast the following expense items for an upcoming budget year: a. Mortgage payments b. Food and household items c. Income and other payroll taxes d. Family members’ personal allowance
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