William is keen to apply his finance knowledge to his real-life saving goals. He is currently...

William is keen to apply his finance knowledge to his real-life saving goals. He is currently 21 years of age and wishes to retire from full-time work at the age of 50 with $2 000 000 in savings.

a) How much will William need to contribute at the end of each month in order to receive $2 000 000 at the age of 50 at a compound interest rate of 6.10% p.a.?

Show formula, variables, calculation and a concluding statement in your response.

b) How much will William need to contribute at the start of each month in order to receive $2 000 000 at the age of 50 at a compound interest rate of 6.10% p.a.?

Show formula, variables, calculation and a concluding statement in your response.

c) Explain why there is a difference between the two amounts determined in parts a) and b) above?

d) Calculate the effective interest rate for William and explain what this number means.

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

JUST WRITTEN IN EXCEL, NO EXCEL FUNCTION IS USED

jeff jeffy answered 1 year ago

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