I will invest $500 per quarter for my retirement at 7.3% compounding quarterly for 32 years. I have a choice of making that payment of $500 at the beginning or the end of the quarter (regular annuity or annuity due). In which account will I have more money and by how much? Which account will earn the most interest and by how much?
I will invest $500 per quarter for my retirement at 7.3% compounding quarterly for 32 years. I have a choice of making that payment of $500 at the beginning or the end of the quarter (regular annuity or annuity due). In which account will I have more money and by how much? Which account will earn the most interest and by how much?
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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pls answer and show cash flow diagram
I will invest $500 per quarter for my retirement at 7.3% compounding quarterly for 32 years. I have a
choice of making that payment of $500 at the beginning or the end of the quarter (regular
annuity due). In which account will I have more money and by how much? Which account will earn the
most interest and by how much?
Ans: Regular Annuity‐ $249981.20, Interest = $185981.20; Annuity Due‐ $254543.36, Interest =
$190543.36
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