Question: (Present value) Sarah Wiggum would like to make a single investment and have $ 1.8 million at the time of her retirement in 28 years.

(Present value)Sarah Wiggum would like to make a single investment and have $1.8 million at the time of her retirement in 28 years. She has found a mutual fund that will earn 7 percent annually. How much will Sarah have to investtoday? If Sarah earned an annual return of 18 percent, how soon could she thenretire?

a.If Sarah can earn 7 percent annually for the next 28 years, the amount of money she will have to invest today is $___ (Round to the nearestcent.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

a. If you deposit $5,000 today into an account earning an annual rate of return of 11%, in the third year how much interest would be earned? $ (Round to the nearest cent.) b. How much of the total is...

Thank you! Homework: Chapter 5 Homework S Score: 0 of 1 pt 3 of 7 (3 complete) HW Score: 37.5%, 3 of P5-12 (similar to) Question Help (Related to Checkpoint 5.4) (Present value) Sarah Wiggum would...

Homework: Chapter 5 Homework Save Score: 0 of 1 pt 3 of 7 (1 complete) HW Score: 12.5%, 1 of 8 pts P5-12 (similar to) Question Help (Related to Checkpoint 5.4) (Present value) Sarah Wiggum would like...

You are planning to buy a 4 bedroom house in Hamilton that has a price of $1,000,000. One of the local banks has offered you a mortgage at a quoted rate of 5% per year. Interest will be compounded...

2 Morrow Inc. has the following information for the current year: 800 Opening inventory (units) Production (units) 7,800 900 $310.00 Ending inventory (units) Sales price (per unit) The company's...

Find f ( x ) if y = f ( x ) satisfies d y d x = 1 3 5 y x 1 4 and the y - intercept of the curve y = f ( x ) is 6 . f ( x ) =

Dry air is bubbled through 25.0 liters of water at a rate of 15.0 liters (STP)/min. The air leaving the liquid is saturated with water at 25C and 1.5 atm. How long will it take for all of the water...

For the past four years, three companies have dominated the soft drink industry, holding a combined 85 percent of market share. Wonder Cola, Inc., ranks second nationally in soft drink sales. Its...

Your aunt recently received the annual report for a company in which she has invested. The report notes that the statements have been prepared in accordance with IFRS. She has also heard that certain...

Bay Area Scientific, Inc. manufactures electronic products, with two operating divisions, the Performance Materials and Communication Technologies divisions. Condensed divisional income statements,...

McLennon Company has a plant capacity of 100,000 units per year, but its budget for this year indicates that only 60,000 units will be produced and sold. The entire budget for this year is as...

Tori and some other childeen experimented with balls to see which ones rolled. First using a piece of cardboard to use as a ramp, they angled it on a block to the floor to test the balls. Then Tori...

Does a firm have an obligation to give employees the flexibility to work out the particular balance of career and family that is right for them? Or does this go beyond the social responsibilities of...

Is the employer-employee relationship essentially contractual"? If tt is, what are the implications of this for business ethics?

Is privacy an employee right? Explain why or why not If it is a righ~ give examples of employer actions or policies that would violate this right.