Question

You work to plan for 10 years and then decide to travel the world, and you figure you can save $1000 a year for the first 5 years and $2000 a year for the next 5 years. These cash flows will occur one year from now. In addition, your family has just given you $15000 as a graduation gift. If you put your gift now, and your future cash flows when they occur in to an investment account that offers 8 percent compounded annually, what will your financial stake is when you will leave for the world tour?​

Answer 1

Explanation:

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INVESTING RETIREMENT PLANNING

How to Calculate Present Value for Retirement

Senior African American couple paying bills

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TABLE OF CONTENTS

BY DANA ANSPACH REVIEWED BY

MARGUERITA CHENG

Updated February 16, 2021

Retirement planning is all about figuring out how much money you need to stow today in order to meet your needs tomorrow. It can feel like a daunting task, but it's easier when you know how to make some simple calculations.

Calculating the "present value" of your money plays an important part in your retirement planning. Put in simple terms, the present value represents an amount of money you need to have in your account today to meet a future expense or a series of future cash outflows, given a specified