Quote:
Originally Posted by moralvirus
A wealthy relative has passed away and left an inheritance of $200,000 to you, which you will receive exactly three years from today. You plan to retire in 23 years, and you will invest this $200,000 wisely, beginning on the day you receive the funds, earning 7% per year until then.
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I can only answer b)...
Quote:
Originally Posted by moralvirus
b) What will your retirement fund be worth on the day you retire?
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To answer this, it depends on whether it is simple or compound.
If it is simple:
200,000 x 0.07 x (23 - 3) = $280000 extra obtained from investment. Therefore:
280000+200000 = $480,000 retirement fund.