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Mahit's grandparents started this portfolio when he was born: Monthly deposits of $80 into an account earning 2.3%, compounded monthly A $5000 investment averaging 4.5%,
Mahit's grandparents started this portfolio when he was born:
- Monthly deposits of $80 into an account earning 2.3%, compounded monthly
- A $5000 investment averaging 4.5%, compounded annually
Based on this information, answer these questions:
- What will be the value of the portfolio when Mahit turns 15? Show your work. (7 points)
- When he turns 15, his grandparents cash in the entire portfolio. They use $7000 of the money so Mahit can visit them in India and invest the rest in a GIC earning 5.45%, compounded semi-annually. How much will the GIq be worth when Mahit turns 18? Show your work. (4 points)
- What is the Rate of Return (ROR) for the investment in part b? Show your work. (3 points)
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Financial Markets and Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
8th edition
013342362X, 978-0133423624
