Question

Over the past several years, Gwen Fong has been able to save regularly. As a result, she has $54,188 in savings and investments today. She wants to establish her own business in five years and feels she will need $100,000 to do so.
a. If she can earn 4 percent on her money, how much will her $54,188 in savings/investments be worth in five years? Will Gwen have the $100,000 she needs? If not, how much more money will she need?
b. Given your answer to part a, how much will Gwen have to save each year over the next five years to accumulate the additional money? Assume that she can earn interest at a rate of 4 percent.
c. If Gwen can afford to save only $4,000 a year, then given your answer to part a, will she have the $100,000 she needs to star.



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  • CreatedFebruary 13, 2015
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