Personal Finance (8th Edition) (What's New in Finance)
8th Edition
ISBN: 9780134730363
Author: Arthur J. Keown
Publisher: PEARSON
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Question
Chapter 3, Problem 1PA
Summary Introduction
To determine:
The number of years to earn one million on investing $250,000 in diversified equity portfolio returning 8 percent per year.
Introduction:
The diversified equity portfolio can be referred to the collection of number of equity shares from different companies. The portfolio is made up of different equity shares which provides different
Expert Solution & Answer
Explanation of Solution
Given,
Investment in the diversified equity portfolio is $250,000.
Required return from investment is $1,000,000.
The calculation of number of years on spreadsheet is,
| Particulars | Amount ($) |
| 1,000,000 | |
| 250,000 | |
| Rate of Interest (%) | 0.08 |
| Number of Years | 18.01293668 |
Table (1)
The number of years is 18.012 years.
Conclusion
Thus, the number of years to earn $1,000,000 by investing $250,000 in diversified equity portfolio returning 8% is 18.012 years.
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Chapter 3 Solutions
Personal Finance (8th Edition) (What's New in Finance)
Ch. 3 - Prob. 1PACh. 3 - Prob. 2PACh. 3 - Prob. 3PACh. 3 - Prob. 4PACh. 3 - Prob. 5PACh. 3 - Prob. 6PACh. 3 - Prob. 7PACh. 3 - Prob. 8PACh. 3 - Prob. 9PACh. 3 - Prob. 10PA
Ch. 3 - Prob. 11PACh. 3 - Prob. 12PACh. 3 - Prob. 13PACh. 3 - Prob. 14PACh. 3 - Prob. 15PACh. 3 - Prob. 16PACh. 3 - Prob. 17PACh. 3 - Prob. 18PACh. 3 - Prob. 19PACh. 3 - Prob. 20PACh. 3 - Prob. 21PACh. 3 - Prob. 22PACh. 3 - Prob. 23PACh. 3 - Prob. 24PACh. 3 - Prob. 1DC1Ch. 3 - Prob. 2DC1Ch. 3 - Prob. 3DC1Ch. 3 - Prob. 4DC1Ch. 3 - Prob. 5DC1Ch. 3 - Prob. 1DC2Ch. 3 - Prob. 2DC2Ch. 3 - Prob. 3DC2Ch. 3 - Prob. 4DC2
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