investment counselor calls with a hot stock tip. He believes that if the economy remains strong, the investment will result in a profit of $60,000. If the economy grows at a moderate pace, thevestment will result in a profit of $10,000. However, if the economy goes into recession, the investment will result in a loss of $60,000. You contact an economist who believes there is a 20%probability the economy will remain strong, a 60% probability the economy will grow at a moderate pace, and a 20% probability the economy will slip into recession. What is the expected profit frothis investment?The expected profit is $tabaps lockesc2.!1(Type an integer or a decimal.)QA2WS#3ED54RF%205TG6(...)MacBook Pro.0YH&7U14V*8J-(9K(O)0LP:;{+ 11[=11I1deletereturn

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Answered: investment counselor calls with a hot…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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The Shrinking Rainy Day Fund. On October 5, 2015 The Boston Globe published a story headlined "state's rainy day fund has dwindled over past decade" that said (in part): In the summer of 2007, before the massive recession began, the rainy day fund had $2.3 billion--a cushion of about 7.8 percent of total state spending, according to the taxpayers' foundation. This summer, the rainy day balance stood at $1.1 billion--about 2.7 percent of total state spending, a fraction small enough to raise a red flag for analysis. Calculate total state spending as of the summer of 2007 and this past summer (2015).
Your client is 37 years old. She wants to begin saving for retirement, with the first payment to come one year from now. She can save $5,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average return of 11% in the future. If she follows your advice, how much money will she have at 65? Do not round intermediate calculations. Round your answer to the nearest cent. $ How much will she have at 70? Do not round intermediate calculations. Round your answer to the nearest cent. $ She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70. If her investments continue to earn the same rate, how much will she be able to withdraw at the end of each year after retirement at each retirement age? Do not round intermediate calculations. Round your answers to the nearest cent. Annual withdrawals if she retires at 65: $ Annual withdrawals if she retires at 70: $
by splitting the loan into two 3 year loans, how much more will you pay in interest ?
A woman, with her employer's matching program, contributes $500 at the end of each month to her retirement account, which earns 6% interest, compounded monthly. When she retires after 40 years, she plans to make monthly withdrawals for 32 years. If her account earns 4% interest, compounded monthly, then when she retires, what is her maximum possible monthly withdrawal (without running out of money)? The maximum possible monthly withdrawal is approximately $. (Simplify your answer. Round to the nearest cent as needed.)
Please respond to both items 1 and 2:Part 1. Discuss which would be a better investment if you were investing for a period of 5 years. Please provide all details.Option 1: $2000 invested at 6% compounded quarterlyOption 2: $2000 invested at 2% compounded continuously Part 2. You just had a baby and want to invest for his college tuition. You found two different accounts: In account one you have to invest $2500 at 2% compounded monthly.In account two, you have to invest $2000 at 4% compounded annually.If you predict that your child will be entering college in 17 years, which account would produce more interest over that time?
3. Suppose that there are two bank accounts, each earning 2% interest, compounded contin- uously. You invest $10 in one account and $5000 in the other. Write 2-3 sentences about how much time it will take each account to double in value.
A young family is looking to enter the property market. They plan to save for a 10% deposit and take out a loan (for the 90% balance). The deposit is for 10% of the property's value at the time the loan is taken out. The property is valued at $890,000 today, and is modelled to increase in value by 0.5% each month. The family can set aside $5,000 each month-end till the 10% deposit is made. The savings account pays interest at a rate of 0.5% each month. When the deposit is reached, a 30-year loan is taken out at an interest rate of 0.6% per month. a. Write the value, P(t) for the value of the property at the end of the tih month. b. Formulate a difference equation for the future value of the savings plan. c. Detail the finite difference solution for S(t), the future value of the savings plan. d. Solve for t, the time when the 10% deposit may be made and calculate the loan amount (to the nearest dollar). e. Detail the solution to calculate the monthly repayment amount (to the nearest…
The following pair of investment plans are identical except for a small difference in interest rates. Compute the balance in the accounts after 10 and 30 years. Discuss the difference. Chang invests $1100 in a savings account that earns 4.1% compounded annually. Kio invests $1100 in a different savings account that earns 4.2% compounded annually. After 10 years Chang will have a balance of approximately $. After 30 years Chang will have a balance of approximately S. (Round to the nearest cent as needed.)

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