Four Years from Now, Tim and Justine Plan to Take

question 117

Short Answer

Four years from now, Tim and Justine plan to take a year's leave of absence from their jobs and travel through Asia, Europe, and Africa. They want to accumulate enough savings during the next four years so they can withdraw $3,000 at each month-end for the entire year of leave. What amount must they pay into the fund at the end of every calendar quarter for the next four years to reach their goal? The planning assumptions are that their savings will earn 6% compounded quarterly for the next four years and 4.2% compounded monthly during the fifth year.

---

Definitions:

Morphogenesis

The biological process that causes an organism to develop its shape and structure.

Power Balance

The distribution of power among entities in a group, organization, or society, aiming for equilibrium where no single entity overwhelmingly dominates.

Moral Absolutism

The ethical belief that certain actions are universally right or wrong, regardless of context or consequences.

Same-Sex Marriages

Marriages between two individuals of the same gender, legally recognized in many countries around the world.