Question
Congratulations! Today is your 20th birthday is today, and you just started working full-time, earning $50,000 per year. Your goal is to have $1 million
Congratulations! Today is your 20th birthday is today, and you just started working full-time, earning $50,000 per year. Your goal is to have $1 million by your 55th birthday (i.e., 35 years from today). Assume 3% inflation per year, AND a marginal federal plus state income tax rate of 32%. if you can earn 11% per year annualized in an S&P 500 mutual fund, after all expenses, inside a roth ira, how much would you need to save each month to have that $1 million if:
a) that $1 million is in future nominal dollars
b) that $1 million is in today's equivalent purchasing power future dollars
c) what will dollar cost averaging do to your investment, and why?
d) what is the after tax monthly cost of your investment?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started