t 35 years old, you have an investment portfolio of $150,000. You are looking into adjusting the allocation of your investments for both your existing portfolio and your future contributions. It is currently at an 80/20 allocation, but now you want to adjust to a 70/30 allocation. You believe that 8% is what stocks will return over the next fifteen years, and 4% is what you expect to return in your bond portfolio. If you invest $700/month for the next fifteen years, what will your portfolio be worth? (assume monthly compounding) $598,652 $632,840 $724,248 $666,051
1.
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At 35 years old, you have an investment portfolio of $150,000. You are looking into adjusting the allocation of your investments for both your existing portfolio and your future contributions. It is currently at an 80/20 allocation, but now you want to adjust to a 70/30 allocation. You believe that 8% is what stocks will return over the next fifteen years, and 4% is what you expect to return in your bond portfolio. If you invest $700/month for the next fifteen years, what will your portfolio be worth?
(assume monthly compounding)
$598,652
$632,840
$724,248
$666,051
2.
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PowerTech Company has issued bonds paying a 4% Coupon Rate. The current market price of the bonds are $920. What is the Current Yield of the bond?
4%
4.9%
3.57%
4.3%
3.
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You are looking to buy a car that costs $25,000. Your bank has told you that they will give a five year loan with an APR of 8% that compounds monthly. What is your monthly payment?
$457.65
$329.67
$524.89
$506.91
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Future value of money is amount being deposited and amount of the compounding interest accumulated over the period of investment. More is the compouding than more is interest being accumulated over the period of time.
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