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In: Finance
Future value (with changing interest rates). Jose has $8,000 to invest for a 2-year period. He...
Future value (with changing interest rates). Jose has $8,000 to invest for a 2-year period. He is looking at four different investment choices.
What will be the value of his investment at the end of 2 years for each of the following potential investments?
a. Bank CD at 4.5%.
b. Bond fund at 7.5%.
c. Mutual stock fund at 12%.
d. New venture stock at 25%.
a. What will be the value of Jose's bank CD investment that offers an annual rate of return of 4.5% for 2 years? $ ___ (Round to the nearest cent.)
b. What will be the value of Jose's bond fund investment that offers an annual rate of return of 7.5% for 2 years? $ ___ (Round to the nearest cent.)
c. What would be the value of Jose's mutual stock fund investment if it earns an annual rate of return of 12% for 2 years? $___ (Round to the nearest cent.)
d. What would be the value of Jose's new venture stock investment if it earns an annual rate of return of 25% for 2 years? $____ (Round to the nearest cent.)
Solutions
Expert Solution
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
jeff jeffy answered 6 months agoRelated Solutions
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Years
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Future Value (Payment made on last day
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Future Value (Payment made on first day
of period)
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15
%
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10
12
76,084
7
14
168,932
11
5
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F
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