Question

Your family owns a velociraptor skeleton that is currently valued at $97.4 thousand. Your grandfather, being an avid fossil collector, bought it 50 years ago for $23.3 thousand. If the skeleton keeps appreciating at the same average annual rate, what would be its value 25 years from now?

You are not thrilled about spending your entire life working. So, you have decided that you will save $7 thousand a year, starting at the end of this year, and retire as soon as you can accumulate $1 million. If you can earn an average of 9.56 percent on your savings, how many years will pass before you get to retire?

Answer 1

Value of the skeleton 25 years from now = $199,140.90

Solution:

Step 1 - calculate the annual rate of appreciation in value of skeleton

Step 2 - compute future value of skeleton after 25 years

Number of years to retirement = 29.41 years

Solution: