Question: Question and Problem 2: Time Value of Money Explain the relationship between FV and PV. Provide an example of how it applies to financial management.

Question and Problem 2: Time Value of Money

Explain the relationship between FV and PV. Provide an example of how it applies to financial management.

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Your client turned 24 today, and is planning to save 25% of their income, or $15,000 per year for retirement, with the first bi-weekly deposit to be made two weeks from today. They will invest in a mutual fund that is expected to provide a 5.25% return per year. If your client plans to retire 45 years from now, at age 69, how much will they have accumulated in the mutual fund under these assumptions?

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