Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Upon starting your new job after college, you've been confronted with selecting the investments for your 401(k) retirement plan. You have four choices for investing

image text in transcribed
image text in transcribed
Upon starting your new job after college, you've been confronted with selecting the investments for your 401(k) retirement plan. You have four choices for investing your money: - A money market fund that has historically returned about 1% per year. - A long-term bond fund that has earned an average annual return of 4.5%. - A conservative common-stock fund that has earned 6.5% per year. - An aggressive common-stock fund that has earned 9% per year. The attached Excel sheet will get you started. Please do the following: 1. If you contribute $5,500 per year (at the end of each year) for the next 35 years, how much would you accumulate in each of the above funds? Indicate and calculate the amount in your Excel sheet. 2. Change your worksheet so it allows for less than annual investments (including monthly, biweekly, quarterly, semiannually, weekly and daily). The annual investment will be the same, but it will be made in smaller, more frequent, amounts. Create a table that shows the future value of each investment option with the more frequent compounding periods. 3. What is the relationship between the frequency of investment and the future value? Create a column chart of the results that more clearly shows the outcome from more frequently investing

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

Step: 3

blur-text-image

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

The Nurse Managers Guide To Budgeting And Finance

Authors: Al Rundio

2nd Edition

1940446589, 978-1940446585

More Books

Students also viewed these Finance questions

Question

Discuss the history of human resource management (HRM).

Answered: 1 week ago