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Periodic (Constant) Investments Periodic Investment Annual Interest Rate Number of Periods per Year Number of Years Marginal Tax Rate $1,000 /period 1.00% 1 5 0.00% 0.01 After-tax Future Value $5,152
Periodic (Constant) Investments Periodic Investment Opportunity Cost of Capital Number of Periods per Year Number of Years Marginal Tax Rate $10,000 /period 7.00% /year 1 30 28.00% 0.0504 After-tax Present Value $153,026
Loan Calculator
Loan Calculator
To Calculate Periodic Payments:
Amount Borrowed (Principal) Annual Interest Rate Term (Years) Payments per Year Periodic Payment $200,000 9.00% 20 years 1 payments per year $21,909.30 per period
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Investment of the Exact Same Minimum Monthly Payment for Same Time Period: Annual Rate of Return on Investment At Payoff, Investment would be worth
Assumes 1 month grace period on initial balance
$2,000 of debt!
$45,783
$2,113
Diversification Table
Investment per year Single Investment Average Rate of Return Investment Portfolio Average Rates of Return: Investment A Investment B Investment C Investment D Investment E Simple Average Annual Return for Portfolio $10,000 /year 8%
The Portfolio value will exceed the Single Investment Value in 13 years. Single Investment Value $232,149 Portfolio Value $233,539
Nominal
1. 2. 3. 4. Annual Retirement Income Desired (current dollars) Expected Annual Social Security Benefits (current dollars) Expected Annual Pension Income (current dollars) Expected Annual Income From Lease of Business Assets or Continued Withdrawal from the Operation $30,000 $0 $0 $0 $30,000 $144,031 $1,957,423 $0 $0 $0 $0 $0 $0 $1,957,423 $7,556 25%
Real
$30,000 $0 $0 $0 $30,000 -------$407,710 $0 $0 $0 $0 $0 $0 $407,710 $4,291 14%
5. Expected Retirement Income Needed From Savings 6. Expected Future Value of Additional Income Needed 7. Expected Amount Needed at Retirement to Generate Additional Income 8. Current Value of Retirement Savings One-Half of Current Value of Home Equity One-Half of Current Value of Business Equity 9. Expected Future Value of Current Savings Expected Future Value of Home Equity Expected Future Value of Business Equity 10. Expected Total Retirement Capital You Need to Accumulate 11. Expected Annual Investment Needed to Reach Your Retirement Goal Percent of Current Income Nominal: Real: $7,556 is the annual contribution you need to make to reach your retirement goals.
$4,291 is the first contribution you need to make. Each year afterwards, your annual contribution must increase by the rate of inflation.
Loan Information:
Original Loan Amount Current Loan Balance Term (years) Interest Rate on Loan Payments/Year Scheduled Periodic Payment Marginal Tax Rate Interest Rate on Investment Breakeven Rate of Return on Investment
Invest while Paying Debt Time to Repay Debt Total Interest Paid Total Potential Tax Savings Investment Acct. Balance 3.2 years $7,238 $1,086 $4,862
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$5,175