QUESTION 3

A)

Were you to invest $50 each month into a mutual fund which averaged an 11% annual return, what would be the mutual fund account value after 12 years? Ignore the impact of taxes and inflation.

		$15,126.98
		$13,627.91
		$14,841.70
		$14,977.75

B)

What would be your future account value (after-tax and after-inflation) if you invested $125 each month into a growth mutual fund for 20 years? Assume an average annual rate of return of 12.5 percent. Assume a combined federal and state income tax of 24% and an average inflation rate of 3.8% over the 20-year period.

		$132,311.70
		$133,689.95
		$54,638.60
		$54,389.77