4. How much do I need to retire? Here are your assumptions. You are 30. You will retire when you are 65. You want $40,000 a year when you retire. You will be an aggressive investor today and have an average market return of 9%. When you retire, you will be conservative in your investing and get into bonds that have a market return of 4.5%. You expect that inflation will be 3%. You currently have $20,000 in savings as of today. You are expecting to live until 85. How much do you need to have saved when you turn 65? (Hint: if you want to work out how much you need to save every year, under PMT, it will be 36 years)

Answer: $1,000,000.00

Answer: $3,200,846.75

Answer: $45,000,000

Answer: $1,940,755.74 5. You are buying a car. You do not like playing the financing game where they leave you in the sales room for an hour to go calculate everything because you are busy, you got stuff to do. The car costs $15,000. The interest on the car is 2.5% annual. You want to pay it off in 5 years. Tell the salesperson what the car payment will be per month. Answer: $180.45

Answer: $266.21

Answer: $789.38

Answer: $50.00 6. You just graduated with your LSUS MHA. Healthcare professionals are eager to hire you. You have two competing job offers. Job #1 offers $50,000 a year with a guarantee raise of 2% a year. Job #2 offers $48,000 with a guarantee of 6% raise every year. You know that you will stay at this job for 5 years minimum. You expect inflation (discount rate) to be around 3%. What job do you take? Answer: Job #1 The NPV is $250,450

Answer: Job #1 The NPV is $238,051

Answer: Job #2 The NPV is $246,984

Answer: Job #2 The NPV is $415,002