Suppose a man invested $250 at the end of 1900 in each of three funds that tracked the averages of stocks, bonds, and cash, respectively. Assuming that his investments grew at the rates given in the table to the right, approximately how much would each investment have been worth at the end of 2012? Category Stocks Bonds Cash His investment in the fund tracking stocks would be worth approximately $ (Do not round until the final answer. Then round to two decimal places as needed.) Average Annual Return 6.7% 2.2% 0.9%
Suppose a man invested $250 at the end of 1900 in each of three funds that tracked the averages of stocks, bonds, and cash, respectively. Assuming that his investments grew at the rates given in the table to the right, approximately how much would each investment have been worth at the end of 2012? Category Stocks Bonds Cash His investment in the fund tracking stocks would be worth approximately $ (Do not round until the final answer. Then round to two decimal places as needed.) Average Annual Return 6.7% 2.2% 0.9%
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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Transcribed Image Text:Suppose a man invested $250 at the end of 1900 in each of three
funds that tracked the averages of stocks, bonds, and cash,
respectively. Assuming that his investments grew at the rates
given in the table to the right, approximately how much would each
investment have been worth at the end of 2012?
Category
Stocks
Bonds
Cash
His investment in the fund tracking stocks would be worth approximately $
(Do not round until the final answer. Then round to two decimal places as needed.)
Average Annual Return
6.7%
2.2%
0.9%
Expert Solution
Step 1
Future value is the estimated value of an asset at a future date based on an assumed growth rate. Investors use future value to evaluate whether to accept or reject their investment proposals.
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