Using TVM principles explain (calculate) what the results would be if your parents started saving a...

Using TVM principles explain (calculate) what the results would be if your parents started saving a set amount monthly of $50 at 4% from when you were born to today. Explain your calculation. Please help me calculate if I was born in 1982 (so 38 years ago).

For example if my parents saving $20 per month from when I was born approximately 52 years ago how much would I have today ? You will use the future value calculation? PV = $0 N = 624 (52 years x 12 months) Rate = 4% Pmt = $20. The Future value would be $41,806.98.

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Expert Solution

Information provided:

Monthly saving= $50

Time= 38 years*12= 456 months

Interest rate= 4%/12= 0.3333% per month

The answer is computed by calculating the future value.

Enter the below in a financial calculator to compute the future value:

PMT= -50

N= 456

I/Y= 0.3333

Press the CPT key and FV to compute the future value.

The value obtained is 53,410.24.

Therefore, I will have $53,410.24 today.

jeff jeffy answered 2 years ago

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Using TVM principles explain (calculate) what the results would be if your parents started saving a...

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