Des(3.3)a month in the stock account and $300 a month in the bond account (your monthly investment would thusnext 20 years. You plan to invest in two investment vehicles: stocks and bonds. You will thus invest $600Being preoccupied with your retirement income, you start planning to save money for retirement over thebused to purchase stocks and bonds for $600 and $300 respectively). The stock account is expected earn12% per year (corresponding to a monthly rate of 12%/12 per month), and the bond account is expected tocom 8% per year (corresponding to a monthly rate of 8%/12 per month). When you retire, you will combineyour money into an account with a 6 percent return per year (corresponding to a monthly rate of 6%/12 permonth).a) What is the value of the stock account 20 years from now?b) What is the value of the bond account 20 years from now?c) What is value of the combined stock and bond accounts 20 years from now?d) How much can you withdraw each month from your account after retirement assuming a 25-yearwithdrawal.4

a) Future Value of the Stock Account 20 Years from NowFor stock investment:Monthly investment (P):…

Answered: Des (3.3) a month in the stock account…

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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You just opened an account with a mutual fund and will invest $200 each month through its automatic investment program. Assuming your earn a 6% annual rate of return, how much money will you have in 5 years?
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