Your client has $3,200 in a stock account right now. Suppose they let it grow for 40 years, not adding anything to it. Interest compounds monthly with an annual rate of 6.2%. If the rate of inflation averages 2.7% over that time, what is the value of that investment account in today's real dollars? Answer = $ (Round to %3D
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- City Garden Suppliers paid a $2 dividend yesterday. It is expected that the dividend will grow at 11 percent per year for 4 years, 8 percent per year for 9 years, and then at 6.75 percent per year thereafter. If the investors' expected rate of return is 11.5 percent, what is the stock worth today? Hint: Use the present value formula for a growing annuity: C1r−g×[1−(1+g1+r)T] . (Do not round intermediate calculations. Round your answer to 2 decimal places.)You would like to know how much you need to save and invest monthly to have a $1 million in your investment account in 40 years. The current balance in the investment account is $10,000. You expect to generate an annual rate of return of 6% in a stock portfolio. $115 $447 $340 $105You are planning to save for retirement over the next 20 years. To do this, you will invest $700 a month in a stock account and $400 a month in a bond account. The return of the stock account is expected to be 9 percent, and the bond account will pay 6 percent. When you retire, you will combine your money into an account with a return of 8 percent. How much can you withdraw each month from your account assuming a 15-year withdrawal period? A. $623407 B. $630939 C. $635876 D. $7480888 E. $2259917
- 1. You just sold a stock for $85. If the stock appreciated at 6% annually, and you owned it for eight years, what was the original price that you paid for the stock? 2. You are considering buying some order fulfillment software that is projected to save your company $27,500 per year for 3 years. If the current rate your company uses to evaluate its investments is 9%, what are you willing to pay for this investment?How many years will take $10,000 to grow to $20,000 if bank offered rate is 10%? How many years will take $25,000 to grow to $120,000 if bank offered rate is 18%? You own a stock that will start paying $0.50 annually at the end of the year. It has zero growth in future. If the required rate of return is 14%, what should you pay per share? You own a stock that will start paying $0.50 annually at the end of the year. It will then grow each year at a constant annual rate of 5%. If the required rate of return is 14%, what should you pay per share?Suppose you purchase 500 shares of Blue Acre, which currently trading at $60 per share. Suppose that after one year the price of Blue Acre rose to $75. You purchased this stock on margin and the margin account had 70% initial margin. The margin loan has an APR of 8% and is compounded monthly. What is your return?
- (i) A client at ZBX Fin Planning deposits $85,000 in an account today in hope that it grows to $150,000 in 6 years. What annual compounded rate would the client need to earn? (Provide answer to nearest basis point, as in "12.34%" or "0.1234") (ii) Now suppose the client realizes she can expect to earn 9.96% APR compounded monthly in another portfolio marketed by ZBX. If the client earns that rate, how many years would it take to realize the above $150,000 goal? (Round number of years to nearest hundredth, as in "1.23" years)You found an investment opportunity to deposit $15,000 every year for 10 years into an account earning8%. You estimate general inflation to be 3% per year. What is the dollar value of your account at the endof 10 years in today’s real dollars?You are planning to save for retirement over the next 30 years. To save for retirement, you will invest $1,700 per month in a stock account in real dollars and $595 per month in a bond account in real dollars. The effective annual return of the stock account is expected to be 12 percent, and the bond account will earn 8 percent. When you retire, you will combine your money into an account with an effective return of 9 percent. The returns are stated in nominal terms. The inflation rate over this period is expected to be 4 percent. a. How much can you withdraw each month from your account in real terms assuming a 25-year withdrawal period? b. What is the nominal dollar amount of your last withdrawal?
- You have 100 million dollars in your investment account and choose to keep your money allocated in the following proportion and rebalance each quarter. i. 60% in stocks via ETF SPY ii. 35% in bonds via ETF TLT iii. 5% in cash Over the month of september , SPYwent from $452 to $429, and TLT went from $149 per share to $144 per share. Cash has an interest rate of 0.1% annually. a) What is your overall account $ balance before rebalancing? What proportions of that is in SPY, TLT, and cash respectively? b) How do you rebalance your account to keep the allocation at 60-35-5 for SPY TLT and cash respectively? What to buy and what to selll in dollar amount?If we were to invest $10,000 in an S&P 500 index fund, pay 0.2% annual fees,and add $100 a month to it for 40 years, receiving 10.4% annual returns, what, theoretically. would happen to our investment with 3.43% annual inflation? What would it be worth in terms of today's dollars? That's 10.4% - 0.2% - 3.43% = 6.77% over 40 years.Assume that you have $10,000,000 in your bank account. You wish to withdraw $400,000 per year, at the end of each year, for the next 5 years, after which you wish to have $11,000,000 in the bank. What is the balance in your account after the 2nd year (after the withdrawal)? Hint: you will need first to solve for rate in Excel given all other parameters. Watch signs. Select one: a. $10,366,644 b. $10,600,000 c. $9,600,000 d. $10,488,912