Fund future cash flows (Learning Objective 3)

Janet wants to take the next five years off work to travel around the world. She estimates her annual cash needs at \(\$ 30,000\) (if she needs more, she'll work odd jobs). Janet believes she can invest her savings at \(8 \%\) until she depletes her funds.

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1. How much money does Janet need now to fund her travels?

2. After speaking with a number of banks, Janet learns she'll be able to invest her funds only at \(6 \%\). How much does she need now to fund her travels?