In: Finance
Sarah opened this portfolio when she turned 45. Semi annual deposits of $3000 into an account averaging 3.4% compounded semi-annually . A $25000 bond earning 7.8% compounded monthly. Based on this information ....... a) What will be the value of the portfolio when she turns 65 Show your work. B)When she turns 65 she cashes in the entire portfolio . she keeps 80,000 to travel around the world for a year and invests the remaining money in an account that pays 7.2% compounded quarterly. How much will the account be worth after 3 years
PARTA | Account | Bond | ||
Present age | 45 | Value | 25000 | |
Semiannual deposits | 3000 | rate-monthly | 7.80% | |
Rate-semiannual | 3.40% | |||
Value of the account after 20 years | $169,875.63 | |||
Value of the bond | $118,371.46 | |||
Total value of portfolio | $288,247.10 | |||
PART B | Amount invested | $208,247.10 | ||
Rate-quarterly | 7.20% | |||
Term | 3 years | |||
Value after 3 years | $257,959.95 |
Workings