Question
Financial advisors usually emphasize investing as early as possible even if it is in small amounts. Arnel thought he would wait to invest for 5
Financial advisors usually emphasize investing as early as possible even if it is in small amounts. Arnel thought he would wait to invest for 5 to 10 years, hoping that by then his salary will be high enough to have more discretionary income. However, he decides to look into a Lion Investment fund and compare a variety of scenarios. First he considers investing $2000 in the fund now which is expected to earn 6% per year compounded annually for 45 years. What will be the value at the end? If he waits 10 years to invest the same amount for 35 years, what will be the value at the end? At what interest rate could Arnel double his $2000 investment in 10 years? Do you think its likely he can find such an investment? What do you recommend he do?
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