Question: A typical young BPO employee in Eastwood drinks 4 cups of coffee (P160 each) and smokes 3 packs of cigarettes (P120 each pack) per week. He occasionally drinks beer when he/she goes out and averages 8 bottles of beer per month (P40 each). Ben, a typical employee, learned about personal finance and decided to cut his coffee/beer/cigarette consumption by half and the equivalent amount would be invested in an equity fund that earns 9% annually compounded monthly (rate is net of all management fees). He just turned 22 years old.
a) How much is his monthly investment?
b) He plans to get married after 10 years. By that time, what is the value of his investment?
c) He thinks that he will need P500.000 for his wedding budget. What is the minimum annual rate of his investment to achieve this target?