Time Value of Money Worksheet Q 1- 3

AutoSave OFF W TVM Worksheet - Saved to my Mac Home Insert Draw Design Layout References Mailings Review View Tell me Share 0 Comments X Calibri (Bo... 11 Af Aa A == = 2 AaBbCcDdEe V Aa Bb CcDdEe AaBbCcDdEe Normal AaBbCD AaBbCcDdE AaBb AaBb CcDd Ee Heading 1 Heading 2 Paste Title BIUab x, x? Subtitle No Spacing ADA Subtle Emph... Dictate V V Styles Pane Time Value of Money Worksheet Name 1. Wenhan and Jiachen are newlyweds and have just purchased a condominium for $70,000. Since the condo is very small, they hope to move into a single-family house in 5 years. How much will their condo be worth in 5 years (FV of a lump sum) if the real estate market is expected to grow at 5% per year? 2. Bill plans to fund his Roth Individual Retirement Account (IRA) with the maximum contribution of $6,000 at the end of each year for the next 20 years. If Bill can earn 7% on his contributions, how much will he have at the end of the twentieth year (FV of an ordinary annuity)? a 3. You want to retire in 30 years and live on $50,000/year (ignore inflation and assume this is what you will live on). How much money will you need to have in 30 years to receive $50,000 per year for 35 years of retirement (PV of an ordinary annuity)? Assume you expect to earn a conservative 4% on your investments in retirement. b. If you can currently earn 8% on investments while you are working, what lump sum would you need to deposit today (PV of a lump sum) in order to have the necessary amount calculated in part a? c. If you can't afford the lump sum in part b., how much would you need to contribute monthly for the next 30 years to have the necessary amount calculated in part a.? Assume you can earn 8%/year, but it is compounded monthly. Solving for PMT but need to adjust interest rate and number of periods for monthly payments. Page 1 of 2 434 words English (United States) Focus + 114%