Please help Ashley Olson is early in her career and 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, she would really like to be a literary agent. She would like to go on her own in about 8 years and figures she'll need about $50,000 in capital to do so. Given that she thinks she can make about 10 percent on her money, use Worksheet 11.1 Download Worksheet 11.1 to answer the following questions.How much would Ashley have to invest today, in one lump sum, to end up with $50,000 in 8 years?If she's starting from scratch, how much would she have to put away annually to accumulate the needed capital in 8 years?How about if she already has $10,000 socked away; how much would she have to put away annually to accumulate the required capital in 8 years?Given that Ashley has an idea of how much she needs to save, briefly explain how she could use an investment plan to help reach her objective. Worksheet 11.1Financial goal:Determining Amount of Investment Capital1. Targeted Financial Goal (see Note 1)2. Projected Average Return on InvestmentsA. Finding a Lump Sum Investment:3. Future Value Factor, from Appendix A, computed here• based onyears to target date and a projected average%return on investment of4. Required Lump Sum Investment• line 1 + line 3B. Making a Series of Investments over Time:5. Amount of Initial Investment, if any (see Note 2)6. Future Value Factor, from Appendix A, computed here• based onyears of target date and a projected average% (1 + i)^timereturn on investment of7. Terminal Value of Initial Investmentline 5 x line 6$$%0.0000.000 8. Balance to Come from Savings Plan• line 1- line 79. Future Value Annuity Factor, from Appendix B, computed here• based onNote 1:years to target date and a projected average% using FV function for value of10. Series of Annual Investments Required over Time•line 8+ line 9Note 2:return on investment of$es$The "targeted financial goal" is the amount of money you want to accumulate bysome target date in the future.If you're starting from scratch-i.e., there is no initial investment-enter zero online 5, skip lines 6 and 7, and then use the total targeted financial goal (from line 1)as the amount to be funded from a savings plan; now proceed with the restof the worksheet.0.00

Investment The process that involves investing funds in a project with an aim to obtain maximum…

Ashley Olson is early in her career and 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, she would really like to be a literary agent. She would like to go on her own in about 8 years and figures she'll need about $50,000 in capital to do so. Given that she thinks she can make about 10 percent on her money, use Worksheet 11.1 Download Worksheet 11.1 to answer the following questions. How much would Ashley have to invest today, in one lump sum, to end up with $50,000 in 8 years? If she's starting from scratch, how much would she have to put away annually to accumulate the needed capital in 8 years? How about if she already has $10,000 socked away; how much would she have to put away annually to accumulate the required capital in 8 years? Given that Ashley has an idea of how much she needs to save, briefly explain how she could use an investment plan to help reach her objective.

Ashley Olson is early in her career and 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, she would really like to be a literary agent. She would like to go on her own in about 8 years and figures she'll need about $50,000 in capital to do so. Given that she thinks she can make about 10 percent on her money, use Worksheet 11.1 Download Worksheet 11.1 to answer the following questions. How much would Ashley have to invest today, in one lump sum, to end up with $50,000 in 8 years? If she's starting from scratch, how much would she have to put away annually to accumulate the needed capital in 8 years? How about if she already has $10,000 socked away; how much would she have to put away annually to accumulate the required capital in 8 years? Given that Ashley has an idea of how much she needs to save, briefly explain how she could use an investment plan to help reach her objective.

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter13: Investment Fundamentals

Section: Chapter Questions

Problem 2LTAI

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