Excellent! Now that you have assisted Albert in organizing his life and have made him aware of any disposable monthly income he might have, it is time to help him evaluate some of his life goals to see if his goals are feasible.

Albert has told you that one of his goals is to start his own business within three years. He has estimated that he will need $7,000 in five years to get his business off the ground. Based upon your research of historical, moderate investment returns you determine that Albert should reasonably be able to obtain a return of 5.5% per year over this timeframe. (maybe use Excel for these next couple of questions)

How much does Albert need to deposit today in order to achieve this goal? Interest compounds annually on this investment.

Based upon Alberts liquidity, does he have enough currently saved to achieve this goal? (think current assets)

Based upon your analysis, Albert wonders if it might be better to put money away each month towards this goal instead of making such a lump sum payment. Using the same information:

Determine the monthly payment Albert would need to make in order to achieve his goal. Assume he will be making an initial investment of $1,000 towards this goal.

After determining the lump sum and monthly payment options for Albert he asks you for your opinion as to which option you feel would be in his best interests.

Which option do you recommend and why?