Overview of Financial Management

Running head: FINANCIAL MANAGEMENT
Financial Management
Name of the Student:
Name of the University:
Author’s Note:

1FINANCIAL MANAGEMENT
Table of Contents
Answer to question 4:......................................................................................................................2
Part a:...........................................................................................................................................2
Part b:...........................................................................................................................................3
Answer to question 5:......................................................................................................................4
Part a:...........................................................................................................................................4
Part b:...........................................................................................................................................4
Part c:...........................................................................................................................................4
References and bibliography:..........................................................................................................5

2FINANCIAL MANAGEMENT
Answer to question 4:
Current age 34 Years
Age of retirement 67 Years
Age after retirement to be self-financed 85 Years
Number of years till retirement (67-34) 33 Years
Number of years from retirement to the age of 85 years (85-67) 18 Years
Current balance in share portfolio investment $47,000
Rate of return on share portfolio investment 7%
Current balance in superannuation account $78,000
Monthly contribution to the superannuation account $1,000
Annual return from the superannuation account 8%
Number of times interest compounded in a year 12 times
Expected balance of investment at the age of 85 years $120,000
Part a:
Future value of share portfolio ¿ [ 47,000 ×(1+7 %)33 ] $438,291
Future value of the superannuation account
¿ [78,000 ×(1+ 8 %
12 )
33 ×12
]+
[ 1000
8 %
12
× {(1+ 8 %
12 )
33 ×12
−1 }] $3,017,141