Janice wants to take the next five years off work to travel around the world.

QUESTION

E26-21 Janice
wants to take the next five years off work to travel around the world. She
estimates her annual cash needs at $28,000 (if she needs more, she will work
odd jobs). Janice believes she can invest her savings at 8% until she depletes
her funds.

1. How much
money does Janice need now to fund her travels?
2. After
speaking with a number of banks, Janice learns she will only be able to invest
her funds at 4%. How much does she need now to fund her travels?

ANSWER:

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