T-BILL AND STOCK INVESTING Joann Gretz (see Example 4, page 419) decides to place half of her $2000 deposit at the end of each year into the bond fund and half into the stock fund. Assume the bond fund earns 6% compounded annually and the stock fund earns 10% compounded annually. Find the amount available in 33 years.

T-BILL AND STOCK INVESTING Joann Gretz (see Example 4, page 419) decides to place half of her $2000 deposit at the end of each year into the bond fund and half into the stock fund. Assume the bond fund earns 6% compounded annually and the stock fund earns 10% compounded annually. Find the amount available in 33 years.

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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Please explain ASAP. Without using Excel
7. If you have been saving money since you were 20 years old and you save $4 daily and, at the end of the year, you invest it all in a mutual fund account that has a 7% annual return, determine the balance of the account when you reach age 62.
3
24. Azizi Bank raises funds through the issuance of a bond which will pay $2,500 at the end of each year for 15 years and on the date of the last payment will also make a separate payment of $100,000. If the investors’ required rate of return on this investment is 9%, how much would they be willing to pay for the Azizi Bank bond today?
Suppose you inherit $100,000 at age 25 and immediately invested in a growth fund who’s annual rate of return average is 13%. Five years later, you transfer all proceeds from the scrubs fun into a long-term IRA that pays an average annual rate of 8%. Immediately you start making additional contributions of $7000 per year to the same IRA. Assuming continuous interest, steady interest rates, and a perfect record of making annualcontributions, how much is this IRA worth when you reach the age of 65? The formula that will need to be used is A = P e^r*t + D/r (e^r*t - 1). Hint: Use the continuous interest formula to find me a cumulated amount for the first five years, which is then the initial investment, P, into the IRA
Pearl Alvarez is investing $323,200 in a fund that earns 8% interest compounded annually. What equal amounts can Pearl withdraw at the end of each of the next 20 years? (Round factor values to 5 decimal places, eg 1.25124 and final answer to O decimal places, eg. 458,581) Yearly withdrawals=
C.10. Assume that at age 25 you have decided to become a millionaire by age 65. You decide to in- vest regularly at the end of every year for 40 years into a fund earning 12 percent interest. The initial investment deposit at EOY 1 will be relatively small, but you expect to increase the amount of each subsequent deposit by 8 percent every year thereafter. (a) Find the amount of the initial investment (deposit at EOY 1). (b) Find the amount of the final investment (deposit at EOY 40).
DRAW CASH FLOW DIAGRAM AND WRITE SOLUTION Ashley purchased a common stock worth $5,000 every year (starting in year 1) for a period of 10 years. At the end of the 10th year, she sold all her stocks to a buyer for $80,000. Find the rate of return received on the investment.
You received $2,500 at your graduation party and have decided to invest it in a stock index fund that earns 8% annually, but pays semi-annually. How much will you have 5 years from now?
Suppose your parents deposit $4,000 into an account at the end of each year for 11 years. The account earns an annual interest rate of 1.4%. After the final deposit, they move the accumulated savings to a brokerage account and invest in the stock market, where they earn an average annual return of 6.9% for the following 16 years. How much will they have in the account at the end? O a. $131,280 O b. $404,155 O c. $137,311 O d. $296,336 e. $302,138 f. $279,603 g. $496,270 h. $249,511
You make single investment of $500 in mutual fund earning 8% annual interest which is compounded monthly. You leave it in the fund for 6 years. After 6 years, you begin depositing $80 per month into the fund. You do this for the next 14 years, A.) How much is in the fund after the first 6 years? Round to the nearest cent B.) How much is in the fund after all 20 years (6+14 years)?Round to the nearest cent
What are the After-tax annualized returns from the following two funds if you invest $1000 in each of them? Assume: You invest for 4 years (hold investments till end of 4th year) and sell your shares at the beginning of 5th year. Tax rate is 25%. Fund B: Distributes 5% Distributed Income return per period. Provides 5% Capital Gain Return Per Period.

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