Time Value of Money: The goal is to show you the link between managerial finance concepts and personal finance. A business includes future investment earnings in the financial plan just as an individual plan for his/her future.

1. Your friend is 20-years old and wishes to accumulate $500,000 by the time she is 65-years old. What advice can you give her based on your knowledge of time value of money? What are some dangers about the plan that you would warn her about?

Consider the following when answering this question: compound interest, opportunity costs, inflation, and risk.