Isaiah is in his 50s and currently does not have a retirement fund. However, heecently read a few articles about the insufficient savings of people in retirement and, as a result, he decides wants to start now. He saves $500 per month for 15 years and earn.n annual return of 7% by investing in the stock market* through an index fund. 11. How much money did Isaiah make through compounded returns in this investment 9. What is the total balance in the account 10. How much of the total did Isaiah contribute after 15 years? himself? account?
Isaiah is in his 50s and currently does not have a retirement fund. However, heecently read a few articles about the insufficient savings of people in retirement and, as a result, he decides wants to start now. He saves $500 per month for 15 years and earn.n annual return of 7% by investing in the stock market* through an index fund. 11. How much money did Isaiah make through compounded returns in this investment 9. What is the total balance in the account 10. How much of the total did Isaiah contribute after 15 years? himself? 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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Montserrat
11
BIUA.
1
I 3 I I
Scenario #3: Isaiah
Isaiah is in his 50s and currently does not have a retirement fund. However, he ecently read a
few articles about the insufficient savings of people in retirement and, as a result, he decides h
wants to start now. He saves $500 per month for 15 years and earn.n annual return of 7% by
investing in the stock market* through an index fund.
11. How much money did
Isaiah make through
compounded returns in
this investment
9. What is the total
10. How much of the total
balance in the account
did Isaiah contribute
after 15 years?
himself?
account?
12. Explain why Isaiah's total balance is less than Pamela's even though his money earned
the same rate of return and his monthly contribution was higher than hers.
The reason Isiah's account balance is less than Pamela's is that long years of investment
will result in a higher compound interest as well as total balance.
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