Personal Wealth Management Essay

517 words - 3 pages

Assume education inflation rate as 2.5%
Assume their monthly saving will be invested instead of deposited into bank.
Objective 1
Determine the future value of the tertiary educations cost of $15,000pa for both Sam & Sally for a period of 3 years whereby Samuel commerce university in 2020 & Sally in 2021.

Sam tertiary education cost commerce in 2020
FV 2020= $15,000(1+0.025)8
FV 2020= $18, 276
FV 2021= $15,000(1+0.025)9
FV 2021= $18,733
FV 2022= $15,000(1+0.025)10
FV 2022= $19,201

Sally tertiary education cost commerce in 2021
...view middle of the document...

05/12, n= 8*12=96
PMT 2020=$155.23

Monthly PMT for 2021
Use FV= PMT[(1+r)n-1/r], r=0.05/12, n= 9*12=108
PMT 2021=$275.40

Monthly PMT for 2022
Use FV= PMT[(1+r)n-1/r], r=0.05/12, n= 10*12=120
$38,403 =PMT[(1+0.00416667)120-1/0.00416667
$38,403 =PMT(155.2823)
PMT 2022=$247.31

Monthly PMT for 2023
Use FV= PMT[(1+r)n-1/r], r=0.05/12, n= 11*12=132
PMT 2022=$112.14

Objective 3
Now the amount needed for the monthly saving are found, we need to sum up all the monthly saving for each year starting from year 2012.
The table express in monthly total for the year
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Saving 2020 $155.22 $155.22

Saving 2021 $275.40 $275.40 $275.40 $275.40 $275.40 $275.40 $275.40 $275.40 $275.40
Saving 2022 $247.31 $247.31 $247.31 $247.31 $247.31 $247.31 $247.31 $247.31 $247.31 $247.31
Saving 2023 $112.14 $112.14 $112.14 $112.14 $112.14 $112.14 $112.14 $112.14 $112.14 $112.14 $112.14
Monthly Total $790.07 $790.07 $790.07 $790.07 $790.07 $790.07 $790.07 $790.07 $634.85 $359.45 $112.14

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