Financial Analysis: Time Value Of Money Formula (Math Problem Sample)
In 250 words, answer of the following.
(1) To live comfortably in retirement, you decide you will need to save $2 million by the time you are 65 (you are 30 years old today). You will start a new retirement savings account today and contribute the same amount of money on every birthday up to and including your 65th birthday. Using TVM principles, how much must you set aside each year to make sure that you hit your target goal if the interest rate is 5%? What flaws might exist in your calculations, and what variables could lead to different outcomes? What actions could you take ensure you reach your target goal?
In 300 words, answer the following. Please provide references used.
(2) Financial ratios are essential to provide an accurate valuation of a firm. Select a publicly traded firm of your choice. You may use the firm you have elected to profile for the course-long Financial Analysis and Proposal assignment or a completely different organization altogether. Select one ratio each in the areas of (a) performance, (b) activity, (c) financing, and (d) liquidity warnings. Provide an evaluation of the selected firm's strengths and weaknesses. Based on the ratios you selected, how well does your chosen firm perform? Explain.
Using the Time Value of Money formula, one needs to firstly identify the number of years remaining before attaining the age of 65. As a result, the number of years is 35. Therefore,
The targeted saving total=$2,000,000
Then, the TVM formula applicable to this scenario is:
Future value = annuity value
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