Answered: a stock index fund that had an average…

a stock index fund that had an average APR of 11% over the last year. estment in 5 years and advise Claire about how to invest the money. There are different e sure to give reasons for your advice.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: Answer in Excel Financial Calculations a. If you are lucky and win $50,000 in a tax-free lottery…

A: Solution a. Maturity amount = $160,357.77 at the end of 20 years.

Q: In the prospectus for the Brazos Aggressive Growth fund, the fee table indicates that the fund has a…

A: The objective of the question is to calculate the amount of the 12b-1 fee and the total expenses…

Q: Dianne has been dollar-cost averaging in a mutual fund by investing $2,000 at the beginning of every…

A: We need to find the future value of quarterly payment of $2,000.Using FV financial function.Rate =…

Q: You are considering investing $1,000 in an investment fund at the end of every quarter for the next…

A: As per the time value of money concept, a certain amount held today is worth more than holding the…

Q: Adam invested $9,000 at the end of each quarter for 6 years in an investment fund. If the balance in…

A: Quarterly deposit = $9000Future value = $245,500Quarterly period = 24 (i.e. 6 years * 4)Quaterly…

Q: Steve Newman will invest $10,240 today in a fund that earns 12% annual interest. Click here to view…

A: To calculate the number of years it will take for the fund to grow to $50,044, we can use the…

Q: Number of periods: You invest $150 in a mutual fund today that pays 9 percent interest annually. How…

A: Future Value formula used: FV= PV(1+r)^n FV= future value = 300 (amount double = 150*2) PV= present…

Q: Elise is adapting the cost averaging in investment. He decided to invest in a mutual fund for 6…

A: In the given problem we need to compute the price of mutual fund units every month, then basis that…

Q: Carlo is adapting the cost averaging in investment. She decided to invest in a mutual fund for 6…

A: We need to compute the price of mutual fund unit every month, basis that we can calculate no. of…

Q: Only on Excel. You purchased $10,000 worth of Chan’s Midcap Value Fund at $23.5 NAV. The fund is a…

A: The rate of return is the percentage of gain or loss one gets from the investment made. This gain…

Q: A graduating CE is going to make $35,000/yr with Granite Construction. A total of 10% of the CE…

A: First deposit in mutual fund (D) = 10% of $35000 = $3500 Growth rate in deposits (g) = 3% n = 30…

Q: Branscr Consider the two savings plans below. Compare the balances in each plan aher 7 years. Which…

A: Future value is the estimation of current value of future cash flows that are likely to be received…

Q: A consultant advises that a fund pays out $100,000 at the end of 5 years. Provided $12,000 is…

A: Annuity due are those payments that are made at the beginning of the year and ordinary annuities are…

Q: . What would you tell her? Round FVA-factor to four decimal places. Round the answer to the nearest…

A: Information Provided: Annual payment = $2000 Term = 23 years Interest rate = 6%

Q: Consider the two savings plans below. Compare the balances in each plan after 9 years. Which person…

A: Future value refers to the value of an investment or asset at a specific point in the future, taking…

Q: in text form with proper workings and explanation for each and every part and steps with concept and…

A: determine the nominal interest rate, use the future value of an annuity formula. With a future value…

Q: You invest $1500 today and another $2000 18-months from today in a fund earning j4 = 8% for the…

A: Future Value (FV) is a financial concept that represents the projected worth of a sum of money at a…

Q: 1. You've invested $1,000 in a mutual fund with a 5% front-end load, an expense ratio of 1% and a…

A: Investment amount = $ 1,000Expense ratio = 1%Front end load = 5%Back end load = 5%Annual Return = 8%

Q: State your answer as a percentage rounded to 1 decimal place. [Only give the numerical answer. Do…

A: Future value of amount includes the amount being deposited over the period of time and amount of…

Q: . $1,000 are deposited in the fund at the end of each of the first 10 years. This means that this is…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: Lauren's investment of $94,600.00 in a fund matured to $163,799.04 in 7 years. If the interest in…

A: The periodic rate is calculated using following equation Periodic rate, r = FVPV(1/n)-1 Where, FV is…

Q: You have just invested a one -time amount of $4,000 in a stock -based mutual fund. This fund should…

A: Investment = $ 4000 Annual return = 6% Investment period = 28 Years

Q: Peter has $30,000 to invest in a mutual fund whose annuai returns are normally distributed with a…

A: Total amount is $30000 Mean is 5.93% Standard deviation is 3.55%

Q: ou are currently 30 years old and have $25,000 saved in an investment account. You plan to add $200…

A: We need to use FV function in excel to calculate amount in account at the time of retirement. The…

Q: David Quincy wants to withdraw $30,800 each year for 10 years from a fund that earns 10% interest.…

A: Given:Annual payment = $30,800Interest rate = 10%Years = 10years.

Q: Please don't use hand rating and correct answer

A: Step 1: Set Up the FormulaWe start with the formula for the future value of an ordinary annuity…

Q: Carlo Elise is adapting the cost averaging in investment. He decided to invest in a mutual fund for…

A: The cost-averaging method means investing the same amount of money in any asset or security at…

Q: The Jeffersons want to start investing $600 monthly to achieve their stated short- and long-term…

A: In this question, we are presented with a scenario involving the Jeffersons, who are looking to…

Q: A perceptive engineer started saving for her retirement 15 years ago by deligently saving Php 18 000…

A: Using the concepts of time value of money, we can solve for this question. Time value of money…

Q: You have just invested a one-time amount of $5,000 in a stock-based mutual fund. This fund should…

A: Given Information, Amount Invested = $5,000 Interest rate =9% Time Period =35 years To Find:…

Q: Settings Your daughter just gave birth to a baby. You are going to invest $20,000 to help pay for…

A: The value under portfolio of stocks after 10 years will be $47,347.27 and value under portfolio of…

Q: Juliana invested $5000 in a fund at the beginning of every three months for five years. The fund was…

A: Future value refers to the current value of the investment at some future date affected by interest…

Q: Harriet has been investing $300 at the end of e much is the fund worth assuming she has earne 40,000…

A: Monthly deposit=$300Period=n=25years=300 monthsInterest rate=12%Compounding monthlyMonthly…

Q: At the beginning, Mrs Jeanine invests $400,000 in Portfolio Z. By next year, the portfolio has grown…

A: We have a portfolio where investments are made in successive years. We have been asked to find the…

Q: How much should GlassilueCat invest in a fund to be able to withdraw $22.000 at the end of every 3…

A: Present Value The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: Gregory invested an amount of $12,000 in a mutual fund. After 3 years and 3 months the accumulated…

A: Semi annual period means a period of 6 months. Hence there are two semiannual periods in a year.

Q: G. Each column in the table below is labeled, complete the table by writing the given data (in…

A: All the answers to the questions are answered using a financial calculator.

Q: 4) Ashley deposits $500 into an investment fund each January 1 starting in 2005 and continuing to…

A: Annual deposit from Jan 1 2005 = $ 500 Period from Jan1 2005 to Jan 2019 = 14 Years Number of annual…

Q: you have just invested a one time amount of $4,000 in a stock based mutual fund. this fund should…

A: Mutual fund is simply a scheme whose bussiness is to take money from the retail investors and make a…

Q: Consider the two savings plans below. Compare the balances in each plan after 6 years. Which person…

A: The worth of an asset now at a point in the future based on an estimated rate of growth is known as…

Q: Karl invested his savings in a short-term fund that was offering a simple interest rate of 5% p.a.…

A: Maturity value=$22,602.44Simple interest rate=5%Time period=360 daysRequired:Principal amount…

Q: You invest $1500 today and another $2000 18-months from today in a fund earning j4 = 8% for the…

A: Future value:The term "future value" refers to the concept of determining the worth or value of an…

Question

1. Claire wants to invest $10,000 she got as a graduation gift from her family. She has the following options.
(i) SAFE: Put it in a savings account that has an APR of 1.5% interest compounded monthly.
(ii) MORE RISKY: Put it in a stock index fund that had an average APR of 11% over the last year.
Find the value of each investment in 5 years and advise Claire about how to invest the money. There are different
ways to advise Claire so be sure to give reasons for your advice.
2. How much must you deposit today into an account with quarterly compounding interest and an APR of 6% in
order to have $30,000 in 10 years for a down payment on a house? Assume no additional deposits are made.
How much of the money saved is interest?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Please
You deposit the following, at the end of each year, into a growth mutual fund that earns 8% per year. Calculate the future total value of the fund at the end of 5 years. Enter Your answer rounded to decimal places, no dollar sign, ex. 5100.54 Year Deposit 1 8,000 2 6,000 3 4,500 4 9,500 5 6,000
You have $5,000 to invest You are comparing two investment funds. Fund A returns 4%/yr compounded monthly Fund B returns 4.05% compounded quarterly. Which should you choose and why?
A financial adviser is reviewing one of her client's accounts. The client has been investing $1,000 at the end of every quarter for the past II years in a fund that has averaged 7.3% compounded quarterly. Using a cash flow diagram, how much money does the client have in his account?
What would be your future account value if you invested $175 each month into a growth mutual fund for 20 years? Assume an average annual rate of return of 13 percent. O $212,675.99 O $246,485.08 O $186,476.36 O $198,317.41
DRAW CASH FLOW DIAGRAM AND WRITE SOLUTION Ashley purchased a common stock worth $5,000 every year (starting in year 1) for a period of 10 years. At the end of the 10th year, she sold all her stocks to a buyer for $80,000. Find the rate of return received on the investment.
If Tara invests $10,000 at 5% interest for 5 years, what will her earnings be at the end of the 5 years? Select one: a.$12,500.00 b.$607.75 c.$2762.81 d.$500.00 Question 2 Question text To express ROI as a percentage, multiply the result of the calculation by _____. Select one: a.10 b.100 c.200 d.1000 Question 3 Question text Which of the following is an example of a limited partnership? Select one: a.Noah and Evan own a used-book store. When the company loses money, the two share the losses equally. b.Kate is the sole owner of her lawn care company. At the end of each business year, she pays all of the taxes on her profits. c.Leah runs a graphic design corporation but has two partners who each own 5 percent of the company. She pays personal income taxes, and her partners pay taxes in proportion to their ownership. d.Sean and Maya are partners in a family business. At the end of the business year, they can declare their losses as a tax deduction, and are…
A quick response will be appreciated
You are 22 years old and you want to have $1 million in your retirement account at age 50. How much money do you need to invest each year (to the nearest $100), if you can get an 8% annual rate of return on mutual funds that invest in S&P 500 stocks? OA $35,700 OB.$10,500 OC. $15,600 O D. $20,600 Reset Selection
At the beginning of each year, you deposit the following into a growthmutual fund that earns 6 percent per year:Year Deposit1 $ 5,000.002 7,500.003 4,500.004 5,500.005 6,200.00 ======== $28,700.00How much should the fund be worth at the end of 5 years?

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS