Jin-Hee seems to have the "perfect" life. Marrying a doctor, buying a new car, a new home, and a great job. Based on questions 1,3, and 5 on page 88 in your textbook - what is some advice on how she can get on track financially to better assure that her life continues to be "perfect"?
1. Your mother just won $250,000 for splitting a nobel prize with three coworkers. If she invests her prize money in a diversified equity portfolio returning 8 percent per year, approximentely how long will it take for her to become a millionaire, before accounting for taxes?
2. Paul Ramos just graduated from college and landed his first "real" job, which pays $23,000 a year. In 10 years, what will he need to earn to maintain the same purchasing power if inflation averages 3 percent?
3. Calculate the future value of $5,000 earning 10 percent after 1 year assuming anual compounding. Now, calculate the future value of $5,000 earning 10 percent after 20 years.