After graduating from Baruch, Amal plans on investing $8,000 every year beginning age 25 to age 65 (40 years). She plans on buying a Total US Stock Market Index fund and expects it will earn a “gross” 10% a year – in line with the historic return from US stocks. How much would her portfolio be worth at age 65 if her expense ratios was 0.05% Ans:

After graduating from Baruch, Amal plans on investing $8,000 every year beginning age 25 to age 65 (40 years). She plans on buying a Total US Stock Market Index fund and expects it will earn a “gross” 10% a year – in line with the historic return from US stocks. How much would her portfolio be worth at age 65 if her expense ratios was 0.05% Ans:

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter13: Investing In Mutual Funds, Etfs, And Real Estate

Section: Chapter Questions

Problem 7FPE

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After graduating from Baruch, Amal plans on investing $8,000 every year beginning age 25 to age 65 (40 years). She plans on buying a Total US Stock Market Index fund and expects it will earn a “gross” 10% a year – in line with the historic return from US stocks. How much would her portfolio be worth at age 65 if her expense ratio was 1.00%? Answer:
Stefani German, a 40-year-old woman, plans to retire at age 65, and she wants to accumulate $420,000 over the next 25 years to supplement the retirement programs provided by the federal government and her employer. She expects to earn an average annual return of about 6% by investing in a low-risk portfolio containing about 20% short-term securities, 30% common stock, and 50% bonds. Stefani currently has $32,620 that at an annual rate of return of 6% will grow to about $140,000 by her 65th birthday (the $140,000 figure is found using time value of money techniques, Chapter 4 Appendix.) Stefani consults a financial advisor to determine how much money she should save each year to meet her retirement savings objective. The advisor tells Stefani that if she saves about $18.23 each year, she will accumulate $1,000 by age 65. Saving 5 times that amount each year, $91.15, allows Stefani to accumulate roughly $5,000 by age 65. a. How much additional money does Stefani need to…
Sarah Wiggum would like to make a single investment and have $2.0 million at the time of her retirement in 35 years. She has found a mutual fund that will earn 4 percent annually. How much will Sarah have to invest today? If Sarah earned an annual return of 14 percent, how soon could she then retire? If Sarah can earn 4 percent annually for the next 35 years, the amount of money she will have to invest today is Round to the nearest cent
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sarah allen is 20 years old and plans to make the following investments beginning next year. she will invest $5,300 in each of the next three years and will then make investments of $5,800, $5,900, $6,000, and $6,200 over the following four years. if the investments are expected to earn 12.30 percent annually, how much will sarah have when she turns 30? (round answer to 2 decimal places, e g. 15.25. do not round factor values.)
sets aside $100 per month during her 40 year career. She invests in the US stock market* through an index fund that averages a 7% return over this 40 year period.
Doris plans to save $5000 per year for the next 35 years. Her money will be deposited in a stock market index fund that has a 0.5% annual management fee. If this fund earns 6% per year, how much will Doris save by investing in this fund instead of an actively managed mutual fund that has a 1% annual fee? Compute your answer as a future amount at the end of year . Assume that payments are made at the end of year. The future equivalent of savings amount at the end of year 35 is ___.
Sarah Wiggum would like to make a single investment and have $1.7 million at the time of her retirement in 40 years. She has found a mutual fund that will earn 6 percent annually. How much will Sarah have to invest today? If Sarah invests that amount and could earn a 13 percent annual return, how soon could she retire, assuming she is still going to retire when she has $1.7 million? To have $1.7 million at retirement, the amount Sarah must invest today is $_________(Round to the nearest cent.) see attachment for PVIF table
Sarah Wiggum would like to make a single investment and have $2.0million at the time of her retirement in 35years. She has found a mutual fund that will earn 4 percent annually. How much will Sarah have to invest today? If Sarah earned an annual return of 14 percent, how soon could she then retire? a. If Sarah can earn 4 percent annually for the next 35 years, the amount of money she will have to invest today is $_____________(Round to the nearest cent.)
A long time ago Lisa had put an amount of $50,000 into an investment in the securities market. Now she has $150,000 in her investment account. Required: If the average rate of return Lisa earned for the investment is 7.6% per year, how many years she has maintained the investment so far? If Lisa would have wished to obtain the target of $150,000 within 10 years only, how much money should she put into the initial investment given the same rate of return is applied? Assume that Lisa would like to put the amount of $150,000 into another investment and aims for a new saving target of $500,000 to buy a new house in 12 years. How much is the rate of return should Lisa aim for to get her $500,000 after 12 years? Lisa has another option for her plan to buy a new house: Using $150,000 as a deposit and get a mortgage from a bank to buy the new house. ANZ bank offered Lisa the lending interest rate of 4.85% per year, compounding semi-annually. Commonwealth Bank offered her a lending rate of…
Sarah Wiggum would like to make a single investment and have $2.0 million at the time of her retirement in 35 years. She has found a mutual fund that will earn 4 percent annually. How much will Sarah have to invest today? If Sarah earned an annual return of 14 percent, how soon could she then retire? If Sarah can earn an annual return of 14 percent, the number of years until she could retire is________years. (Round to one decimal place.)