- Budgeting
- Cash Management
- Consumer and Mortgage Loans
- Debt and Debt Reduction
- Time Value of Money 1: Present and Future Value
- Time Value of Money 2: Inflation, Real Returns, Annuities, and Amortized Loans
- Insurance 1: Basics
- Insurance 2: Life Insurance
- Insurance 3: Health, Long-term Care, and Disability Insurance
- Insurance 4: Auto, Homeowners, and Liability Insurance
- The Home Decision
- The Auto Decision
- Family 1: Money and Marriage
- Family 2: Teaching Children Financial Responsibility
- Family 3: Financing Children’s Education and Missions
- Investments A: Key Lessons of Investing
- Investments B: Key Lessons of Investing
Case Study #1 Answer
There are two ways for Lee to solve the problem. Using the formula, the problem is solved this way:
FVn,i = Payment * [(1 + i)n –1] /i = FV = $4,000 * [(1.06)30 –1]/.06 = $316,232.75
If you are using a financial calculator, clear the calculator’s memory and solve:
1 = P/Y (payments per year)
4,000 = PMT (payment)
6 = I (interest rate)
30 = N (number of years)
Solve for FV = $316,232.75
