1. Compute the future value of $6750, which is invested for 65 years at an annual rate of return of 8%. Show your formula and steps.
2. Based on Berkshire 2019 annual letter, the average annual rate of return for S&P 500 with dividends included is 9.7%. If you invest $10,000 now into a no-fee index fund which mimics the performance of S&P 500, how much is your account worth when you are at the age of 70?
3. Explain the power of compounding interest and why its important to save now.
4. Both articles mentioned about index fund investing. Explain what is index fund investing and why index fund investing is smarter than investing in actively managed vehicles, such as mutual funds, hedge funds, etc.