Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1) Barney and Betty both invested $5,000 three years ago. They both earned a 8% return, however Barney earned a simple return of 8% and

1)Barney and Betty both invested $5,000 three years ago. They both earned a 8% return, however Barney earned a simple return of 8% and Betty earned a compounded return of 8%. How did this difference in compounding affect their investments' value today?

A)Their investments will be worth the same

B)Betty will have $98.56 more than Barney

C)Barney will have $333.99 more than Betty

D)Barney will have $480 more than Betty

E)Betty will have $667.98 more than Barney

2)If you plan to save $14,000 every year for retirement for 20 years. Assuming that you earn a 8% return on your investment, compounded annually, how much money will you have when you retire? A)$230,987 B)$302,400 C)$640,668 D)$137,454 E)$64,2453

3)Ana has a goal to buy a $1.3 million beach house in 10 years. If she expects to make 7% in the market, how much does she need to invest today to buy her beach house in 10 years?

A)$762,523.94 B)$660,854.08 C)$390,000.00 D)$120,900.00 E)$620,921.32 4)Which will be worth more in 30 years: $200 invested today at a rate of 8% $15 invested every year at a rate of 11%

A)The $200 invested today will be worth $2,985.31 more in 30 years B)The $200 invested every year will be worth $2,0912.53 more in 30 years C)The $200 invested today will be worth $972.78 more in 30 years D)Both will be worth the same in 30 years E)The $15 invested every year will be worth $972.78 more in 30 years

5)What is your ending balance using compound interest of an investment of $1,550 with an interest rate of 6.0% after 10 years?

A)$16,340.00

B)$5,745.34

C)$5087.64

D)$2,480.00

E)$2,775.81

6).For the past 10 years, Andrew has been investing $250 into the stock market at the end of every year. The value of his previous investments now is $4,000. What was the annual rate of return on Andrew's investments? (round to the nearest number)

A)7.7%

B)4.6%

C)5.0%

D)8.8%

E)10.1%

7).For the past 15 years, Jen has been investing $300 into the stock market at the end of every year. The value of her previous investments now is $7,500. What was the annual rate of return on Jen's investments?

A)8.9%

B)7.5%

C)13.7%

D)5.8%

E)6.9%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Investing In Financial Research A Decision Making System For Better Results

Authors: Cheryl Strauss Einhorn, Tony Blair

1st Edition

1501732757, 9781501732751

More Books

Students also viewed these Finance questions