Homework Answers
Amount Invested each month = P = $100
Monthly interest Rate = r = 0.12/12 = 0.01
Let the number of months be n
Future Value required = FV = $1000000
Hence, FV = P(1+r)n-1 +....+ P(1+r)2 + P(1+r) + P = P[(1+r)n -1]/r
=> 1000000 = 100[(1+0.01)n -1]/0.01
=> (1+0.01)n = 1 + 1000000*0.01/100 = 101
=> n = ln(101) / ln (1.01) = 463.82
Hence, it will take 463.82 months for the account to reach $1000000
463.82 months = 463.81/12 = 38.65 years
Add Answer to:
23. If you invest $100 per month in the stock market, how long will it be...
23. You are looking to save money and invest $10,000. You deposit money in a savings...
23. You are looking to save money and invest $10,000. You deposit money in a savings account that pays 5.5% and money in the stock market that loses 3%. Between the two investments you make a total $295. How much did you invest in the savings account and stock market? X- 24. You are looking to save money and invest $12,000. You deposit money in a savings account that You are 10 avs 4.5% and money in the stock market...
Assume that you would like to purchase 100 shares of preferred stock that pays an annual...
Assume that you would like to purchase 100 shares of preferred stock that pays an annual dividend of $6.00 per share. However, you have limited resources now, so you cannot afford the purchase price. In fact, the best you can do now is to invest your money in a mutual fund that offers an average return of 6% compounded monthly. Because the preferred stock is riskier, it has an annual rate of return of 12% (assume that this rate will...
Assume you plan to retire in 35 years. If you invest $180.00 per month in the...
Assume you plan to retire in 35 years. If you invest $180.00 per month in the broad U.S. equity market and earn annual returns of 9.5% over that period, how much money will you have accumulated on the day you plan to retire? Note: Enter your answer rounded to the nearest dollar. For example, if your calculated accumulated amount is $225,784.63 enter it as: 225,785 or 225785.
3. You have $10,000 to invest in a stock portfolio. Your choices are Stock X with...
3. You have $10,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 21.0% and a standard deviation of 40% and T-Bills (e.g., the risk free asset) with an expected return of 5% and a standard deviation of 0%. How much money will you invest in Stock X if your goal is to create a portfolio with an expected return of 26%? The amount of money in dollars) that I will invest in...
20. Assume that you are setting up your retirement plan by considering two investment plans together....
20. Assume that you are setting up your retirement plan by considering two investment plans together. (Your retirement in 20 years). You want to earn a total of $1,000,000 after 20 years from the following two investment plans together. Investment plan #1 : You currently have $20,000 in the bank and decide to invest that $20,000 in a money market account for 20 years which you feel will generate a return on 6% per year. Investment plan #2: You also...
You want to invest in the stock market. You are willing to pay $100 per share...
You want to invest in the stock market. You are willing to pay $100 per share of stock of a well- run and profitable company. However, if the company is badly run, you are only willing to pay $10 per share of stock. You read a report that 80% of companies in the market are well run and 20% are badly run. Answer the following questions: a. Calculate your expected value of a stock chosen randomly among those for sale....
You receive $4,000 from your aunt when you turn 21 and you immediately invest the money...
You receive $4,000 from your
aunt when you turn 21 and you immediately invest the money in a
saving account. The account earns 12% annual rate, with continuous
compounding. You get your first job after 5 years. a. Determine the
accumulated saving in this account at the end of 5 years. b. You
want to retire from work in 20 years. If you deposit $100 into your
account every month for the first 10 years, and $200 every month
for...
Assume that you can invest $1,000 in a savings account or a fund consisting of different...
Assume that you can invest $1,000 in a savings account or a fund consisting of different stocks. If you invest in the savings account, you get 1% interest per year. The fund has annual return X with expected value E(X) = 6% and standard deviation o(X) = 20%. This means that, compared to the savings account, the fund has a higher return on average, but also comes with risk. When you invest y dollars in the fund, you will have...
You invest $1000 per month for 9 months starting 4 months from now (i.e., from month...
You invest $1000 per month for 9 months starting 4 months from now (i.e., from month 4 to month 12), and then you increase your investment by $100 per month for 2 years (i.e., from month 13 to month 36). If the rate of return is 60% per year, what is the equivalent annual worth ($ per year) of this cash flow in years 1 to 3?
answer both please 12. Now let's work backwards. Assume that you will all live until 100...
answer both please 12. Now let's work backwards. Assume that you will all live until 100 (a good news!), but will have to retire by 65 (a bad news^^). You estimate that you will need to draw at least $3,000 per month of living expenses out of your retirement account after you retire (assume no inflation). Suppose that your retirement account will keep earning 6% APR after you retire. If you want to ensure that your retirement account will not...
23. You are looking to save money and invest $10,000. You deposit money in a savings account that pays 5.5% and money in the stock market that loses 3%. Between the two investments you make a total $295. How much did you invest in the savings account and stock market? X- 24. You are looking to save money and invest $12,000. You deposit money in a savings account that You are 10 avs 4.5% and money in the stock market...
3. You have $10,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 21.0% and a standard deviation of 40% and T-Bills (e.g., the risk free asset) with an expected return of 5% and a standard deviation of 0%. How much money will you invest in Stock X if your goal is to create a portfolio with an expected return of 26%? The amount of money in dollars) that I will invest in...
20. Assume that you are setting up your retirement plan by considering two investment plans together. (Your retirement in 20 years). You want to earn a total of $1,000,000 after 20 years from the following two investment plans together. Investment plan #1 : You currently have $20,000 in the bank and decide to invest that $20,000 in a money market account for 20 years which you feel will generate a return on 6% per year. Investment plan #2: You also...
You want to invest in the stock market. You are willing to pay $100 per share of stock of a well- run and profitable company. However, if the company is badly run, you are only willing to pay $10 per share of stock. You read a report that 80% of companies in the market are well run and 20% are badly run. Answer the following questions: a. Calculate your expected value of a stock chosen randomly among those for sale....
You receive $4,000 from your
aunt when you turn 21 and you immediately invest the money in a
saving account. The account earns 12% annual rate, with continuous
compounding. You get your first job after 5 years. a. Determine the
accumulated saving in this account at the end of 5 years. b. You
want to retire from work in 20 years. If you deposit $100 into your
account every month for the first 10 years, and $200 every month
for...
Assume that you can invest $1,000 in a savings account or a fund consisting of different stocks. If you invest in the savings account, you get 1% interest per year. The fund has annual return X with expected value E(X) = 6% and standard deviation o(X) = 20%. This means that, compared to the savings account, the fund has a higher return on average, but also comes with risk. When you invest y dollars in the fund, you will have...
You invest $1000 per month for 9 months starting 4 months from now (i.e., from month 4 to month 12), and then you increase your investment by $100 per month for 2 years (i.e., from month 13 to month 36). If the rate of return is 60% per year, what is the equivalent annual worth ($ per year) of this cash flow in years 1 to 3?
Most questions answered within 3 hours.
-
Calculate the number density of argon gas at a temperature of
24C and a pressure of...
asked 27 minutes ago -
Alternative
Classification
How to Estimate
Probabilities from Data? ( For continuous Attributes)
And How to generate...
asked 30 minutes ago -
An explosion breaks a 20.0-kg object into three parts. The
object is initially moving at a...
asked 1 hour ago -
Calculate the approximate number of residues of Rubisco, which
is involved in carbon fixation in plants,...
asked 2 hours ago -
Other decisions about scientific claims can have a much broader
impact.ENERGYarrow-10x10.png, environment, health, security - all...
asked 3 hours ago -
I need to write a research paper and work cited about this
topic: The United States...
asked 3 hours ago -
Hello! I was wondering if I could have some help?
If the vapor pressure of carvone...
asked 4 hours ago -
An economist wants to estimate the mean per capita income (in
thousands of dollars) for a...
asked 4 hours ago -
What would be the input/output characteristic of a circuit
obtained by putting two of your 2's-complementers...
asked 4 hours ago -
In Drosophila, the transition from the syncytial blastoderm
stage to the cellular blastoderm stage is a...
asked 4 hours ago -
Project management question:
Name 3 different types of resources (hint: humans are one
type)
asked 5 hours ago -
Consider the following reaction: C 2H 2( g) + 2H 2( g) C 2H 6(
g)...
asked 5 hours ago