Skip to content

CFP® Practice Question of the Week: Saving for a Future Purchase

Al wants to purchase a lake house in 20 years when he retires. The house currently costs $450,000 and inflation is 4%. As his certified financial planner, Al asks for your guidance in identifying how much he should save at the beginning of each year to accomplish his goal of purchasing the house with cash at the end of 20 years. He expects to earn 12.5% annually after-tax on his investments.

  1.  $5,238
  2.  $8,573
  3.  $9,645
  4.  $11,478
  5.  $12,912