Finance Project
Section I. Future Investment Plans A. Retirement Plan
I believe it is crucial as a young investor to begin early, and this is something that I have done already. The advantage of this is using the help of compounding interest to increase the amount of money in a retirement plan. I expect to work 30 years until retirement full time, say at $75,000 a year.
N= 40 PV=-75000 I/Y= 3% FV= $244652.83
182,044.68 each year in 2045
Spend about 60% of 75,000 in retirement so $125,000 each year in retirement (75,000/. 6)
I expect to live 30 years after retirement so I will have a nest egg of $5,120,655.32. At an interest rate of two and half percent,
RR= I/Y= 2.5% N= 30 PMT= 244652.83
PV= $5120655.32 nest egg
It would require $11,569.68 each year to save for retirement.
N=40 I/Y= 10 FV= 5120655.32
PMT= $11569.68 to save each year for retirement. This is only about $1000 a month. With investments and other income I think that this amount is achievable.
B. Down Payment on a House
Another investment goal that I have is to have my own house at the age of 26. This gives me four years upon graduation to find a job and start saving for the down payment on a house. According to my research, this would require between 5-20% of the house’s value. I would specifically, depending on the bank, invest 15% of the house’s value for a down payment. After hunting around on Zillow.com, which was a thrill, I found that my first house would range around $150,000-$200,000. 15% of $175,000, halfway between the $150,000-$200,000, would be $26,250. This seems to be a very reasonable/achievable future investment plan. The savings for a down payment over four years would be about $6,500 a year which is very reasonable to achieve, again assumed that I would be making $75,000/year.
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Section II. Investment Categories
Before taking this class I was
I believe it is crucial as a young investor to begin early, and this is something that I have done already. The advantage of this is using the help of compounding interest to increase the amount of money in a retirement plan. I expect to work 30 years until retirement full time, say at $75,000 a year.
N= 40 PV=-75000 I/Y= 3% FV= $244652.83
182,044.68 each year in 2045
Spend about 60% of 75,000 in retirement so $125,000 each year in retirement (75,000/. 6)
I expect to live 30 years after retirement so I will have a nest egg of $5,120,655.32. At an interest rate of two and half percent,
RR= I/Y= 2.5% N= 30 PMT= 244652.83
PV= $5120655.32 nest egg
It would require $11,569.68 each year to save for retirement.
N=40 I/Y= 10 FV= 5120655.32
PMT= $11569.68 to save each year for retirement. This is only about $1000 a month. With investments and other income I think that this amount is achievable.
B. Down Payment on a House
Another investment goal that I have is to have my own house at the age of 26. This gives me four years upon graduation to find a job and start saving for the down payment on a house. According to my research, this would require between 5-20% of the house’s value. I would specifically, depending on the bank, invest 15% of the house’s value for a down payment. After hunting around on Zillow.com, which was a thrill, I found that my first house would range around $150,000-$200,000. 15% of $175,000, halfway between the $150,000-$200,000, would be $26,250. This seems to be a very reasonable/achievable future investment plan. The savings for a down payment over four years would be about $6,500 a year which is very reasonable to achieve, again assumed that I would be making $75,000/year.
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Section II. Investment Categories
Before taking this class I was