Question
(Future value) Sarah Wiggum would like to make a single lump-sum investment and have $2.1 million at the time of her retirement in 28 years.
(Future value) Sarah Wiggum would like to make a single lump-sum investment and have $2.1 million at the time of her retirement in 28 years. She has found a mutual fund that expects to earn 6 percent annually. How much must Sarah invest today? If Sarah earned an annual return of 16 percent, how much must she invest today?
a. If Sarah can earn 66percent annually for the next 28 years, how much will she have to invest today?
$_____
b. If Sarah can earn 1616 percent annually for the next 2828 years, how much will she have to invest today?
$_____
(Compounding using a calculator) Lisa Simpson wants to have $1.4 million in 40 years by making equal annual end-of-the-year deposits into a tax-deferred account paying 8.75 percent annually. What must Lisa's annual deposit be?
The amount of Lisa's annual deposit must be $ ____
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