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The following table shows the average returns for some of the largest mutual funds commonly found in retirement plans. (Assume end-of-month deposits and withdrawals and
The following table shows the average returns for some of the largest mutual funds commonly found in retirement plans. (Assume end-of-month deposits and withdrawals and monthly compounding, and assume that the quoted rate of return continues indefinitely.)
Mutual Fund | Fidelity Growth Company | Vanguard 500 Index | PIMCO Total Return | Vanguard Total Bond Market Index |
---|---|---|---|---|
Rate of Return | 15.83% | 14.25% | 3.77% | 2.67% |
Type | Stock fund | Stock fund | Bond fund | Bond fund |
How much should you pay each month into a retirement account invested in the Vanguard bond fund if you wish to retire in 25 years with an investment valued at two million dollars? HINT [See Quick Example 2.] (Round your answer to the nearest cent.)
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