Question

Today, Bruce and Brenda each have $150,000 in an investment account. No other contributions will be made to their investment accounts. Both have the same goal: They each want their account to reach $1 million, at which time each will retire. Bruce has his money invested in risk-free securities with an expected annual return of 5 percent. Brenda has her money invested in a stock fund with an expected annual return of 10 percent. How many years after Brenda retires will Bruce retire? 12.6 O 19.0 O 19.9 O 29.4 O 38.9 Previous Page Next Page Page 8 of 30

Answer 1

1)	Bruce
	Return	5%
	No. of years	38.88
	Brenda
	Return	10%
	No. of years	19.90
	No. of additonal years	18.98		Correct answer is 19 years
2)	Karen
	PMT	5000
	ROI	10%
	Value	$2,439,259
3)	Statements A & B are correct