Mr. Heffernan wants to give his twin son and daughter $100,000 each when they turn 18....
Mr. Heffernan wants to give his twin son and daughter $100,000 each when they turn 18. Currently they are 3 years old. How much does Mr. Heffernan need to save on a monthly basis? Assuming that he could invest his savings at a portfolio that earns 4% per year.
(Show calculations using Excel)
Homework Answers
Mr. Heffernan need to save $812.71 on a monthly basis
Workings
Since interest rate given in annual but we need to calculate monthly amount, the interest rate too will be divided by 12. This will ensure that we are using monthly interest rate to calculate monthly amount.
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Mr. Heffernan wants to give his twin son and daughter $100,000
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