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Use age 23 please 1. Assume a hypothetical age that has not been chosen by any other students, assume you buy $10,000 worth of an
Use age 23 please
1. Assume a hypothetical age that has not been chosen by any other students, assume you buy $10,000 worth of an index ETF. At your retirement age of 67 , the value of this $10,000 investment is $350,000.00. What is the average rate of return on your investment? 2. Assuming a hypothetical age that has not been chosen by any other students, you can earn 10% per year compounded monthly in the stock market by investing in S\&P500; assume you buy $10,000 worth of an index ETF that represents S\&P500. At what age your initial investment of $10,000 will be $50,000 ? 3. Assume a hypothetical age not assumed by other students. Assume you drink one coffee per day, 5 days a week. Assume the coffee price is $4.00. That makes it $20 per week and $80 per month. Assume you can invest $80 per month in the stock market and assume you can earn 1% per month on your stock investment or 12% per year. At your retirement, when you are 67 years old, how much you will have in your retirement account if you switch from coffee drinking to investing in the stock market? 4. Following question 3, Assume that when you get to 67 (retirement age) you switch your stock market investment to bond market investment. Assume you can earn 7% on your bond investment. You decide to withdraw a constant amount each year for the next 20 years when you get to the retirement age of 67 . How much will be you annual withdrawal over the next 20 years, from age 68 to 87 (Nothing left at 87 ) if you invest all of your accumulated stock investment to bond investment at your retirement age of 67? 5. Given your hypothetical age, and assume the average stock market return is 10% per year compounded monthly how much per month you should save (In IRA or 401K, or other tax defer retirement accounts) in order toStep by Step Solution
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