Question

In: Accounting

Year Return 1980 32.42 1981 -4.91 1982 21.55 1983 22.56 1984 6.27 1985 31.73 1986 18.67...

Year

Return

1980

32.42

1981

-4.91

1982

21.55

1983

22.56

1984

6.27

1985

31.73

1986

18.67

1987

5.25

1988

16.61

1989

31.69

1990

-3.1

1991

30.47

1992

7.62

1993

10.08

1994

1.32

1995

37.58

1996

22.96

1997

33.36

1998

28.58

1999

21.04

2000

-9.1

2001

-11.89

2002

-22.1

2003

28.68

2004

10.88

2005

4.91

2006

15.79

2007

5.49

2008

-37

2009

26.46

2010

15.06

2011

2.11

2012

16

2013

32.39

2014

13.69

2015

1.38

2016

11.96

2017

21.83

2018

-4.38

2019

31.49

How much money would you have by the end of 2019? Problem 4. Hard problem: Suppose that you invested $x in 1980. Plot the amount of money you would have in 2019 for all values of $x between $0 and $100,000. Solve using R Studio

Solutions

Expert Solution

Let us consider the Investment amount in the beginning of 1980 be $100,000. For other amounts just start with that amount and follow the formula. It can be easily done is Excel.

$ 100,000 will become $8,698,412.757 at the end of 2019. The calculations and formulas for calculation are done below

I have colour segregated different columns for easy understanding.

Values are rounded upto 3 to 4 decimal points.

Year

Return %

Compounding Rate= ( 1 + Return)

Value of investment at the beginning of the year

Value of investment at the End of the year = Value of Investment at the beginning of the year × Compounding Rate for the year

1980

32.42

1.3242

100000

132420

1981

-4.91

0.9509

132420

125918.178

1982

21.55

1.2155

125918.178

153053.5454

1983

22.56

1.2256

153053.5454

187582.4252

1984

6.27

1.0627

187582.4252

199343.8433

1985

31.73

1.3173

199343.8433

262595.6447

1986

18.67

1.1867

262595.6447

311622.2516

1987

5.25

1.0525

311622.2516

327982.4198

1988

16.61

1.1661

327982.4198

382460.2997

1989

31.69

1.3169

382460.2997

503661.9687

1990

-3.1

0.969

503661.9687

488048.4477

1991

30.47

1.3047

488048.4477

636756.8097

1992

7.62

1.0762

636756.8097

685277.6786

1993

10.08

1.1008

685277.6786

754353.6686

1994

1.32

1.0132

754353.6686

764311.137

1995

37.58

1.3758

764311.137

1051539.262

1996

22.96

1.2296

1051539.262

1292972.677

1997

33.36

1.3336

1292972.677

1724308.362

1998

28.58

1.2858

1724308.362

2217115.692

1999

21.04

1.2104

2217115.692

2683596.833

2000

-9.1

0.909

2683596.833

2439389.521

2001

-11.89

0.8811

2439389.521

2149346.107

2002

-22.1

0.779

2149346.107

1674340.618

2003

28.68

1.2868

1674340.618

2154541.507

2004

10.88

1.1088

2154541.507

2388955.623

2005

4.91

1.0491

2388955.623

2506253.344

2006

15.79

1.1579

2506253.344

2901990.747

2007

5.49

1.0549

2901990.747

3061310.039

2008

-37

0.63

3061310.039

1928625.324

2009

26.46

1.2646

1928625.324

2438939.585

2010

15.06

1.1506

2438939.585

2806243.887

2011

2.11

1.0211

2806243.887

2865455.633

2012

16

1.16

2865455.633

3323928.534

2013

32.39

1.3239

3323928.534

4400548.986

2014

13.69

1.1369

4400548.986

5002984.142

2015

1.38

1.0138

5002984.142

5072025.324

2016

11.96

1.1196

5072025.324

5678639.552

2017

21.83

1.2183

5678639.552

6918286.567

2018

-4.38

0.9562

6918286.567

6615265.615

2019

31.49

1.3149

6615265.615

8698412.757


Related Solutions

Year Yearly Return 1983 11% 1984 9.3% 1985 8.1% 1986 13.6% 1987 10% 1988 12.8% 1A....
Year Yearly Return 1983 11% 1984 9.3% 1985 8.1% 1986 13.6% 1987 10% 1988 12.8% 1A. Please find the arithmetic mean return for this asset. 1B. Please find the geometric mean return for this asset. 1C. Please find the variance for the returns on this asset.
Compute the annual standard deviation of returns for all countries from 1980 – 1981 Year Month...
Compute the annual standard deviation of returns for all countries from 1980 – 1981 Year Month Australia Canada France Germany Italy 1980 7 -0.0026889 0.0546111 -0.0204165 0.0369633 0.1278857 1980 8 0.0407999 -0.0117627 0.0244608 -0.0230018 0.0696608 1980 9 0.060746 0.0135679 0.0113528 -0.0190223 0.1420983 1980 10 0.0585204 -0.0220067 0.0920545 -0.0205731 0.2766413 1980 11 -0.0175011 0.0490367 -0.0163204 -0.0030604 -0.0968726 1980 12 -0.030612 -0.074856 -0.0757283 -0.0210946 0.0017446 1981 1 -0.0965194 -0.0119725 -0.0590439 -0.034434 0.1904963 1981 2 -0.0241678 -0.0322855 0.0308526 -0.0096864 0.0908233 1981 3 0.0816266...
year lean 1975 642 1976 644 1977 656 1978 667 1979 673 1980 688 1981 696...
year lean 1975 642 1976 644 1977 656 1978 667 1979 673 1980 688 1981 696 1982 698 1983 713 1984 717 1985 725 1986 742 1987 757 The engineers working on the tower were very interested in how much the tower would lean if no corrective action was taken. Use the OLS estimation to predict the tower's lean in the year 2000 if no corrective action had been taken.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT