Reference no: EM132483790

Question 1: The motivation for making investments is largely driven by the goals you have. These goals could be short-term such as buying a new car, saving for a down payment or save enough to take a year off and travel. In any situation, the first step is to identifying the amount of capital you need and how much risk are you willing to take for the return you expect.

Question 2: Victor is a 23-year-old dietician whose primary long-term financial goal is to save enough to take a year off and travel. Therefore, he wants to begin an investment plan that will make this a reality within 5 years. He currently has $3,000 saved for this purpose, and he wants to determine the appropriate monthly savings amount that will allow him to reach his goal. He estimates that he can earn an average annual return of 5%, and he would like to save a total of $20,000 to cover his expenses for the year.