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GRADED DISCUSSION WEEK 2
How many of us would like to accumulate a cool million dollars by the time we retire? Money doesn’t buy happiness but it sure does pay the bills.
1. Go to the CNNMoney.com web site and play with the Millionaire calculator.
Enter your current savings, contribution, and average return and the result will indicate how long it will take for you to accumulate your first MILLION.
2. Go to how fast will your savings grow, at http://cgi.money.cnn.com/tools/savingscalc/savingscalc.html and check how much your money could grow if you enter the number of years. Play with several of the values like savings per month and expected rate of return and notice how the number of yours changes.
3. Answer at least three of the five questions below. Comment of two of your peers as well.
a) What happens to the length of time it takes you to become a millionaire when you increase your savings per month?
b) What happens when you increase the expected rate of return?
c) How do taxes impact your accumulation?
d) Why are marginal tax rates important instead of average? What rate should you use for an expected return?
e) What should you do if you want to become a millionaire sooner than the calculator indicates?
Each of you will have different conditions and constraints. Have fun and play with the calculators. If you know of another fun and informative calculator, feel free to share this with the class.