Use Worksheet 11.1. Phoebe Jones is now employed as the managing editor of a well-known business journal. Although she thoroughly enjoys her job and the people she works with, what she would really like to do is open a bookstore of her own. She would like to open her store in about five years and figures she'll need about $ 60,000 in capital to do so. Given that Phoebe thinks she can make about 9 percent on her money, use Worksheet 11.1 to answer the following questions.

How much would Phoebe have to invest today, in one lump sum, to end up with $60,000 in five years? Round the answer to two decimal places.

$______________________

If she's starting from scratch, how much would she have to put away annually to accumulate the needed capital in five years? Round the answer to two decimal places. $_____________________________

How about if she already has $20,000 socked away, how much would she have to put away annually to accumulate the required capital in five years? Round the answer to two decimal places. $_________________________________

Given that Phoebe has an idea of how much she needs to save, briefly explain how she could use an investment plan to help reach her objective.