Allison and Leslie, who are twins, just received$15,000 each for their 29th birthday. Theyboth have aspirations to become millionaires.Eachplans to make a $5,000 annual contributionto her "early retivement fund" on her birthday,begiming a year from today. Allison opened anaccount with the Jafety First Bund Fund, a mutualfund that invests in high-quality bonds whoseinvestors have earned 8% per year in the past.Leslie invested in the New Issue Bio- Tech Fund,which invests in small, newly issued bio tech stucksand whose investors have earned an average of 17%per year in the find's relatively short history.u) If the two women's funds eam the same returnsin the future as in the past, how old will each bewhen she becomes a millionaire? Round your answersto two decimal places.yearsAllisonLeslie.yearsb) How large would Allison's annual contributions haveto be for her to become a millionaire at thesame age as Leslie, assuming their expected returnsare realized? Round your answer to the nearest cent.

Here, AllisonLeslieCurrent Amount received $ 15,000.00 $ 15,000.00Current Age2929Annual…

Allison and Leslie, who are twins, just received $15,000 each for their 29th birthday, They both have aspirations to become millionaires. Each plans to make a $5,000 annual contribution to her "early retivement fund" on her birthday, begining a year from today. Allison opened an account with the Jafety First Bund Fund, a mutual find that invests in high-quality bonds whose investors have earned 8% per year in the past, Leslie invested in the New Issue Bio-Tech Fund, which invests in small, newly issued bio tech stocks and whose investors have earned an average of 17% por year in the find's relatively short history. mani 4) If the two women's funds eam the same returns in the future as in the past, how old will each be when she becomes a millionaire? Round your answers to two decimal places. Gears Allison Leslie. years b) How large would Allison's annual contributions have to be for her to become a millionaire at the same age as leslie, assuming their expected returns are realized: Round your answer to the nearest cent.

Allison and Leslie, who are twins, just received $15,000 each for their 29th birthday, They both have aspirations to become millionaires. Each plans to make a $5,000 annual contribution to her "early retivement fund" on her birthday, begining a year from today. Allison opened an account with the Jafety First Bund Fund, a mutual find that invests in high-quality bonds whose investors have earned 8% per year in the past, Leslie invested in the New Issue Bio-Tech Fund, which invests in small, newly issued bio tech stocks and whose investors have earned an average of 17% por year in the find's relatively short history. mani 4) If the two women's funds eam the same returns in the future as in the past, how old will each be when she becomes a millionaire? Round your answers to two decimal places. Gears Allison Leslie. years b) How large would Allison's annual contributions have to be for her to become a millionaire at the same age as leslie, assuming their expected returns are realized: Round your answer to the nearest cent.

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

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Twins graduate from college together and start their careers. Twin 1 invests $1500 at the end of each year for 10 years only (until age 31) in an account that earns 9%, compounded annually. Suppose that twin 2 waits until turning 40 to begin investing. How much must twin 2 put aside at the end of each year for the next 25 years in an account that earns 9% compounded annually in order to have the same amount as twin 1 at the end of these 25 years (when they turn 65)? (Round your answer to the nearest cent.)
Ben invested $7,500 twenty years ago with an insurance company that has paid him 6 percent simple interest on his funds. Charles invested $7,500 twenty years ago in a fund that has paid him 6 percent interest, compounded annually. How much more interest has Charles earned than Ben over the past 20 years?
Hamza and Khalifa have been best friends since high school. They have recently learnt about the concept of superannuation, and are now both planning their retirement early. Both Hamza and Khalifa would like to have $2 million at the age of 60, each, when they retire. Hamza plans on depositing equal annual amounts into his superannuation fund on each birthday, starting at the age of 21, and ending at the age of 60 (that includes a deposit on the 60th birthday as well). Khalifa, however, starts making deposits into his superannuation fund on his 30th birthday and plans to deposit equal annual amounts on each birthday until he turns 60 (that includes a deposit on the 60th birthday as well). If the investment funds earn 10% per year, calculate the amounts the Hamza and Khalifa respectively will have to save each year to meet their retirement goals. Comment on the difference.
Joseph Kirn has just inherited $827,790 which he would like to use as part of his retirement nest egg. He invested the funds at a 3.47 percent annual rate compounded annually. Joseph will reach age sixty in 17 years and will retire early. Now he would like to know how much he could withdraw from the fund in equal installments at the end of each year from the year he reaches age 60 until he reaches age 70½, the year he must start withdrawing funds from his individual retirement account (IRA). Joseph assumes the funds will continue to earn at a 3.47 percent annual rate. In other words, Joseph would like to know the annual year-end payment from an eleven-year annuity (from age 60 to the year he will be 70½), earning 3.47 percent annually. Round the answer to two decimal places.
Your uncle Mohammed is celebrating his 33th birthday today and wants to start saving for his retirement at the age of 63. He wants to be able to withdraw AED 100,000 from his saving account on each birthday for 20 years following his retirement. The first withdraw will be on his 64th birthday. Your uncle intends to invest his money in a local bank in Abu Dhabi that offers 7% interest rate per year. He wants to make equal payments on each birthday into the account established in the local bank for his retirement fund. If your uncle starts making these deposits on his 33th birthday and continues to make deposits until he is 63, what amount must he deposit annually to be able to make the desired withdrawals at retirement?
Twins Natalie and Kaitlyn are both age 27. They both live in Warren, Ohio. Beginning at age 27, Natalie invests $2,000 per year for ten years and then never sets aside another penny. Kaitlyn waits ten years and then invests $2,000 per year for the next 30 years. Assuming they both earn 7 percent, how much will each twin have at age 67.
As part of his 401(k) retirement plan at work, Ken Lowery invests 5.0 percent of his salary each month in the Capital Investments Lifecycle Fund. At the end of this year, Ken's 401(k) account has a dollar value of $210,800. If the fund charges a 12b-1 fee of 0.75 percent, what is the amount of the fee? (Round your answer to 2 decimal places.) 12b-1 fee
Carl is the beneficiary of a $ 20,000 trust fund set up for him by his grandparents. Under the terms of the trust, he is to receive the money over a 5-year period in equal installments at the end of each year. If the fund earns interest at the rate of 5%/year compounded annually, what amount will he receive each year? (Round your answer to the nearest cent.) $
Two people plan to invest $50,000. Matt is going to invest it in one lump sum and leave it in the account for 25 years to use for retirement. Sarah is going to invest $2000 per year for 25 years and will also use the money in the account for retirement. Is it reasonable to expect that Matt will have more money in his account than Sarah does in 25 years if both accounts earn the same interest?
Manya and Sarah are both starting out in their careers. They choose two different paths to saving in their 401k accounts for their retirements. Manya is 23 years old and decides to start depositing $500 monthly in her 401k which will earn 7.6% APR. Manya will retire at the age of 67. a) How many years will Manya be saving money in her 401k? years b) How much will be in Manya's 401k when she retires? $ c) How much will Manya have deposited herself over her years of working from her salary? d) How much will Manya have earned in interest over her years of working? Sarah waits to begin depositing money into a 401k (for various reasons that seemed important at the time...) until she was 45 years old. She decides to deposit twice as much as Manya per month hoping to catch up. Assume that Sarah gets the same 7.6% APR and will retire at the same age of 67. e) How many years will Sarah be saving money in her 401k. years f) How much will Sarah be depositing in her account each month? g) How much…
Jamie turned 50 years old today. She has just contributed $2,000 to a retirement savings account and plans to continue making annual contributions, until (and including) her 65h birthday. She increases the amount of each contribution by 3% every year and the account earns an annual investment return of 12%. Write an equation for the amount Jamie will have in her retirement account on her 65" birthday. a. What is the first term? Number b. What is the common ratio? Enter your answer as an exact expression. c. How many terms are in the equation? Number d. How much will Jamie have in her retirement account on her 65h birthday? Number
Allison and Leslle, who are twins, just received $35,000 each for their 22th birthday. They both have aspirations to become millionaires. Each plans to make a $5,000 annual contribution to her "early retirement fund" on her birthday, beginning a year from today. Allison opened an account with the Safety First Bond Fund, a mutual fund that invests in high-quality bonds whose investors have earned 7% per year in the past. Leslie invested in the New Issue Blo-Tech Fund, which Invests in small, newly Issued bio-tech stocks and whose investors have earned an average of 14% per year in the fund's relatively short history. a. If the two women's funds earn the same returns the future as in the past, how old will each be when she becomes millionaire? Do not round Intermediate calculations. Round your answers to two decimal places. Allison: years Leslie: b. How large would Allison's annual contributions have to be for her to become a millionaire at the same age as Lesile, assuming their expected…

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