Bob Katz would like to save $250,000 over the next 25 years. If Bob knows today that he will be given $150,000 in 15 years as part of an inheritance, how much would Bob need to save annually over the next 25 years assuming he earns 4% interest?

Bob Katz would like to save $250,000 over the next 25 years. If Bob knows today that he will be given $150,000 in 15 years as part of an inheritance, how much would Bob need to save annually over the next 25 years assuming he earns 4% interest?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 39P

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Concept explainers

Real Estate

Real estate means ownership of land along with the assets and natural resources that exist on the land. These properties are in real/physical form which is tangible. Real estate simply means land or addition made to land permanently like constructing a residence or different buildings. People invest in real estate to either reside or for wealth creation. Many people investing in real estate further lend the place for occupation or businesses in return for a monthly payment.

Question

Bob Katz would like to save $250,000 over the next 25 years. If Bob knows today that he will be
given $150,000 in 15 years as part of an inheritance, how much would Bob need to save annually
over the next 25 years assuming he earns 4% interest?
O $672
O $1156
O $2078
O $2449

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