Question

In: Finance

Today, Ralph and Sara each have $500,000 in an investment account. No other contributions will be...

  1. Today, Ralph and Sara each have $500,000 in an investment account. No other contributions will be made to their investment accounts. Both have the same goal: They each want their account to reach $1.5 million, at which time each will retire. Ralph has his money invested in risk-free securities with an expected annual return of 4 percent. Sara has her money invested in a stock fund with an expected annual return of 11 percent. How many years after Sara retires will Ralph retire? Pick the closest answer.

    a

    16.24
    b

    19.0
    c

    10.53
    d

    17.48
    e

    28.01

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 2 weeks ago
Next > < Previous

Related Solutions

You are considering an investment by depositing $25,000 to an account today and making monthly contributions...
You are considering an investment by depositing $25,000 to an account today and making monthly contributions of $300 into the account for 10 years. If you want to have $100,000 in the account after 10 years, what annual interest rate must you earn from the account? If you go ahead with the investment and decide to increase the monthly contribution to $400 after 5 years (deposit $25,000 today, $300 monthly for the first 5 years), how much will you have...
You are considering an investment by depositing $25,000 to an account today and making monthly contributions...
You are considering an investment by depositing $25,000 to an account today and making monthly contributions of $300 into the account for 10 years. If you want to have $100,000 in the account after 10 years, what annual interest rate must you earn from the account? If you go ahead with the investment and decide to increase the monthly contribution to $400 after 5 years (deposit $25,000 today, $300 monthly for the first 5 years), how much will you have...
You have an initial investment today of $10,000. Each year you add to the account 2.6%...
You have an initial investment today of $10,000. Each year you add to the account 2.6% more than the previous year. If the interest rate is 5.3% what is the future value of this income stream at the end of 25 years?
Today is 1 January 2019. Kim is looking for an investment that will give her $500,000...
Today is 1 January 2019. Kim is looking for an investment that will give her $500,000 in 5 years’ time so that she will have a sufficient deposit to purchase a $2.5m house in Sydney. Currently she has saved about $380,000 to contribute to the deposit. She has started looking at Treasury bonds as she thinks they are a relatively low risk investment. However, she did not study finance at University so does not have a good understanding of Treasury...
Mary plans to make the following contributions to her retirement account: $10,000 for each of the...
Mary plans to make the following contributions to her retirement account: $10,000 for each of the next ten years, and $12,000 for each of the ten years after that. If her savings earn 5%, how much will she have at the end of the 20 years. Ignore taxes and assume that the contributions are made at the end of the year.
You make a $7,000 deposit to an investment account today. The investment earns 6% p.a compounding...
You make a $7,000 deposit to an investment account today. The investment earns 6% p.a compounding monthly for the first 12 months, then it earns 13%p.a compounding monthly for the next 3 years. At the end of the 4 years the balance in the account is (to the nearest whole dollar; don't use $ sign or commas)
You make a $1,000 deposit to an investment account today. The investment earns 5% p.a compounding...
You make a $1,000 deposit to an investment account today. The investment earns 5% p.a compounding monthly for the first 12 months, then it earns 10%p.a compounding monthly for the next 3 years. At the end of the 4 years the balance in the account is (to the nearest whole dollar; don't use $ sign or commas)
If you deposit $10,000 in an investment account today, it can double in value to $20,000...
If you deposit $10,000 in an investment account today, it can double in value to $20,000 in just a couple of decades even at a relatively low interest rate (say, 4%).
You are planning to buy a house worth $500,000 today. You have $100,000 savings for the...
You are planning to buy a house worth $500,000 today. You have $100,000 savings for the down payment. A 30-year fixed-rate mortgage is 6.00% APR. a. Suppose if you take the 30-year loan, how much is your monthly payment? b. Show the payment for interest and principal separately for the first three months. c. Ten years later, the 30-year fixed-rate mortgage rate reduces to 3% APR. So you decide to refinance the debt with a new 30-year fixed-rate loan. How...
Eileen in Sara did not take any distributions for 2018. However they each have a guaranteed...
Eileen in Sara did not take any distributions for 2018. However they each have a guaranteed payment as a result of the capital they contributed. Eileen receives $10000 Sara receives $12000. What is the cost of goods sold for the bean buzz for 2018 in what is the amount for their ordinary income or loss?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT