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Financial Planning Model

# Financial Planning Model - Therefore to reach a...

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The Formal Model = - + - + + = n t n t t n n k C E k W W 1 1 0 ) 1 )( ( ) 1 ( Where: W n = the financial goal in \$’s W 0 = the starting amount of money today (if any) in \$’s k = the rate of return earned on savings E t = the money earned in a year in \$’s C t = the money consumed or spent in a year in \$’s (E t - C t ) = annual savings if positive
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Unformatted text preview: Therefore to reach a pre-determined financial goal (dollar amount must be specified) at time n is a function of: 1. Starting amount of money to be allocated to the goal 2. The annual savings 3. The rate of return the savings earns 4. The length of time over which the funds are accumulated....
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Financial Planning Model - Therefore to reach a...

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