In 1981, twin sisters were each given an inheritance of $10,000. one sister( Abby) placed her inheritance in an index fund in the stock market that earned her an average annual return of 9% over thenext 40 years. The other sister( Gabby) invested her money in a series of certificate of deposit accounts(CD's). For the first 20 years, Gabby was able to make average annual returns of 5% investing in CD's, but the second 20 year period, she earned annual returns of only 3%. Assume that inflation averaged 3.5% annually for this 40 year analysis period. a) How many actual dollars does Abby have today? b) How many actual dollars does Gabby have today? c) How many real 1981 based dollars does Abby have today?
In 1981, twin sisters were each given an inheritance of $10,000. one sister( Abby) placed her inheritance in an index fund in the stock market that earned her an average annual return of 9% over thenext 40 years. The other sister( Gabby) invested her money in a series of certificate of deposit accounts(CD's). For the first 20 years, Gabby was able to make average annual
a) How many actual dollars does Abby have today?
b) How many actual dollars does Gabby have today?
c) How many real 1981 based dollars does Abby have today?
d) How many real 1981 based dollars does Gabby have today?
e) What is the increased
f) What is the increased buying power that Gabby has today as compared to 1981?
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