Question
Simone is now 50 years old and plan to retire at age 67 (in 17 years). She currently has a share portfolio worth $750,000, a
Simone is now 50 years old and plan to retire at age 67 (in 17 years). She currently has a share portfolio worth $750,000, a superannuation fund worth $1,200,000, and a money market (similar to cash) account worth $500,000. Her share portfolio is expected to provide annual returns of 12% p.a. (compounded annually), her superannuation will earn her 9% p.a. (compounded annually), and the money market account earns 1.2% p.a. (compounded monthly). Assume all these returns are aftertax. Assume Simones superannuation contribution is $25,000 (after-tax) per year for the next 17 years (starting 1 year from now).
a. If Simone stick to her current investment choices, how much will the total value of her investments be worth when she retires at 67 (in 17 years)?
Need complete formula and calculation process.
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