Carol is a professional tennis player ranked in the top 50 in the world.She is currently 21 years old.She will be able to play tennis until the age…

Carol is a professional tennis player ranked in the top 50 in the world. She is currently 21 years old. She will be able to play tennis until the age of 34. After that she will coach the next generation of tennis stars. 

Given the short-term nature of a professional tennis career she realizes that she must save in order to achieve her future financial goals. 

Currently she earns $120,000 annually. She expects her earnings to grow at a rate of 3% throughout the 13 years. 

Based on her performance she is on track to be in the top 25 by year 5 and will have an increase in earnings by 35%. After that, she will be ranked #1 by year 8, which will generate an increase in her earnings by 50%. There will be no changes in her earnings once she reaches #1 and she will retire at the age of 34.

Carol has also been approached by Nikey, a large sports company that would like to use her in their advertisements. She will sign a deal with them in year 5 and will receive an annuity of $500,000 for a period of 3 years on top of her regular earnings.

She currently plans to save 20% of her earnings annually. In year 5 when she signs the endorsement deal she will increase her savings to 40% for the term of the contract and then drop back down to 20% for the last 5 years. 

Assume inflation is 2%. She earns 7.5% on her deposits (after-tax). Use real after-tax rates for your calculation. Assume all earnings noted throughout the question are after-tax. All payments are at the end of the year. 

Disclaimer – the earnings provided in this question are not an accurate depiction of what a tennis player will earn at these levels. Carol will earn much more once she attains these rankings!

How much will she have saved at the end of her professional tennis playing career? 

Show more

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more