Amount to invest to meet objectives. Use Worksheet 11.1 Download Use Worksheet 11.1

Ashley Olson is early in her career and is now employed as the managing editor of a well-known business journal. Although she thoroughly enjoys her job and the people she works with, she would really like to be a literary agent. She would like to go on her own in about 8 years and figures shell need about $50,000 in capital to do so. Given that she thinks she can make about 10 percent on her money, use Worksheet 11.1 Download Worksheet 11.1 to answer the following questions.

How much would Ashley have to invest today, in one lump sum, to end up with $50,000 in 8 years?

If shes starting from scratch, how much would she have to put away annually to accumulate the needed capital in 8 years?

How about if she already has $10,000 socked away; how much would she have to put away annually to accumulate the required capital in 8 years?

Given that Ashley has an idea of how much she needs to save, briefly explain how she could use an investment plan to help reach her objective.

Worksheet 11.1 Determining Amount of Investment Capital Financial goal