Sammy want to save $5,000,000 by the time he are 65. He turned 25 years old yest

Question

Sammy want to save $5,000,000 by the time he are 65. He turned 25 years old yesterday. He has twin daughters that are two years old today. Sammy wants to pay each daughter $40,000 per year for five years for anticipated college expenses. The first payment will begin when his daughter turns 18. Sammy also has $10,000 saved and he plans to invest it at 8% annual interest until he turn 65. Additionally, he anticipates selling a property he owns tens years form today for an after tax profit of $100,000, which he will then invest until he turn 65 at 8% per year. How much money does need to save each year starting today if he earns 8% on his investments annually to reach his goal? How much each month starting today? Suppose you did not fund your daughter's education. What would your answer now be?

Explanation / Answer

x*(1+0.08) =5000000 =X= 5000000/1.8 =$2777777.77 as annually from 25 to 65 =45 yrs so 2777777.7/40 = $69,444

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