Future value of a portfolio. Rachel and Richard want to know when their current portfolio will be sufficient for them to retire. They have the following balances in their portfolio: Money market account (MM): $38,000 Government bond mutual fund (GB): $145,000 Large capital mutual fund (LC): $103,000 Small capital mutual fund (SC): $75,000 Real estate trust fund (RE): $86,000 Rachel and Richard believe they need at least $2,400,000 to retire. The money market account grows at 3.5% annually, the government bond mutual fund grows at 5.5% annually, the large capital mutual fund grows at 9.0% annually, the small capital mutual fund grows at 13.5% annually, and the real estate trust fund grows at 4.5% annually. With the assumption that no more funds will be deposited into any of these accounts, how long will it be until they reach the $2,400,000 goal?

Future value of a portfolio. Rachel and Richard want to know when their current portfolio will be sufficient for them to retire. They have the following balances in their portfolio: Money market account (MM): $38,000 Government bond mutual fund (GB): $145,000 Large capital mutual fund (LC): $103,000 Small capital mutual fund (SC): $75,000 Real estate trust fund (RE): $86,000 Rachel and Richard believe they need at least $2,400,000 to retire. The money market account grows at 3.5% annually, the government bond mutual fund grows at 5.5% annually, the large capital mutual fund grows at 9.0% annually, the small capital mutual fund grows at 13.5% annually, and the real estate trust fund grows at 4.5% annually. With the assumption that no more funds will be deposited into any of these accounts, how long will it be until they reach the $2,400,000 goal?

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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Similar questions

It's currently April of 2021. Janet decides she wants to invest 10,000 dollars at the beginning of every April (on the first) and ending on April 1, 2050. She chooses to invest in an Exchange Traded Fund with an expected return of 8% / year how much money will Janet have on April1, 2051?
H4.
Assume the role of a financial advisor. You have 3 new clients. Each of them came to you with $100,000 to invest. You suggest to each other them to put the money into mutual funds. What mutual funds do you suggest for each client and why. Support your recommendations. Jose - 29 Years of Age. Working. Makes $250,000 a year. Married. No kids. No immediate need for cash. Investing Risk Tolerance = High. Cynthia - 49. Single. 3 kids. Working. Makes a modest annual income. Ages 13, 15, 17. All kids plan to attend college. Plans to use some of this money to help pay for college tuition. Investing Risk Tolerance = Moderate. Jackie - 80. Retired. Receives a modest retirement income. Needs money to help pay monthly expenses. She is healthy. She also has three older siblings in their 90's. Investing Risk Tolerance Low.
Peter and Blair recently reviewed their future retirement income and expense projections. They hope to retire in 29 years and anticipate they will need funding for an additional 20 years. They determined that they would have a retirement income of $62,000.00 in today's dollars but that they would actually need $86,142.00 in retirement income (in today's dollars) to meet all of their objectives. a. What is their annual shortfall at retirement assuming inflation of 3 percent per year? Click on the table icon to view the FVIF table: b. At the time that they retire, how much additional amount must they have accumulated to fund their retirement needs, assuming 3 percent inflation and a rate of return of 9 percent? Click on the table icon to view the PVIFA table: c. Calculate the additional amount that Peter and Blair must save each year for the next 29 years if they wish to completely fund their income shortfall. Click on the table icon to view the FVIFA table:
Jackie wants to retire with $ 2.1 million in savings by the time she turns 64. She is currently 23 years old. How much will she need to save each year, assuming she can get a 10% annual return on her investments? (show all inputs in your answer Training )M = N = I = PV = PMT = FV =
Are annuities good investments? To answer this question, consider the situation of John. He is 50 years old and can purchase a lifetime annuity for $100,000. The annuity pays John $8,000 per year for the rest of his life. If John lives to be 85, what rate of return will he earn on this investment? What if John only lives to be 77? If John lives to age 85, his IRR is If John lives to age 77, his IRR is ... % per year. (Round to two decimal places.) % per year. (Round to two decimal places.)
7.
A ROTH IRA or 401(k) allows you to take money out tax free, and thank your Professor for telling you to open, and fund this type of investment! O True O False
Array intends to allocate her savings into various types of financial investments. She has $184,100 to invest in stocks, bonds, and mutual funds according to her chosen 10 2 10 ratio 779 investment? Round your answers to the nearest dollar. Stocks: $ Bonds: $ respectively. How much should she invest in each type of Mutual Funds: $
K Sarah Wiggum would like to make a single investment and have $2.4 million at the time of her retirement in 30 years. She has found a mutual fund that will earn 3 percent annually How much will Sarah have to invest today? Sarah invests that amount and could eam a 13 percent annual return, how soon could she retire, assuming she is still going to retire when she has $2.4 million? Click on the table icon to view the PVIF table 4 To have $2.4 million at retirement, the amount Sarah must invest today is 5 (Round to the nearest cent) If Sarah invests that same amount and earn a 13% annual return, she could retire in approximately years (Round to one decimal place)

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