You have just graduated from college, and your personal goal is to retire in 40 years, when you are about 62 years of age. To do so, you think you will need to have amassed $10,000,000 on the date of your retirement. Your parents plan to gift $36,000 annually to you, and you plan to save an additional $15,000 annually from your wages.
Assume you invest the annual $36,000 gift from your parents and your annual $15,000 of savings at the end of each year at an 8% rate.
a. Show calculations to determine whether you will have enough in 40 years to meet your $10,000,000 retirement goal.
b. Show calculations to determine the exact rate of return on your annual investments of gifts from your parents combined with your annual savings that will result in exactly $10,000,000 in 40 years. (Round your answer to the nearest tenth of a percent.)
Mortgage amount: $630,000
Term: 30 years (360 months)
Annual fixed interest rate: 6.0% (.5% per month)
Payments are due monthly at the end of each month. The monthly payment is the same amount over life of the loan; the loan is fully amortizing.