- 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
Data:
Lee is thirty-five years old and makes a $4,000 payment every year into a Roth Individual Retirement Account (IRA) (this is an annuity) for thirty years.
Calculations:
Assuming the discount, or interest, rate Lee will earn is 6 percent, what will be the value of his Roth IRA investment when he retires in thirty years (this is future value)?
Note: The formula is a bit tricky. The formula is:
FVn = Payment * [(1 + i)n –1] /i (this is the future value of an annuity factorn,i)
