Question
Assume that you have 30 years until retirement. Assume that in year 1 (next year), you will put in the initial deposit, $10,000. Assume that
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Assume that you have 30 years until retirement. Assume that in year 1 (next year), you will put in the initial deposit, $10,000. Assume that your future deposits will grow at the rate of 3% per year. How much will you have in your portfolio, if you invest your money in the (a) typical long-term Government bond fund, which earns 6.5% per year (incidentally, according to damodaran.com, that should be about the considerably better than average LT governmental bond yield over the long investment horizons)? (b) typical large stock fund, which earns 10.8% per year (incidentally, according to our notes, that should be about the average large stock yield over any 30-year period during the last 60 years)?
(a) $1,196,315 (b) 2,469,154
(a) $300,000 (b) $300,000
(a) $879,280 (b) $1,915,432
(a) $130,587 (b) $88,323
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