This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: You have 5,000 in an index mutual fund. At an average annual rate of return of 10 per year, this ... (Read 82 times)

nevelica

  • Hero Member
  • *****
  • Posts: 563
on: Jul 10, 2018
You have 5,000 in an index mutual fund. At an average annual rate of return of 10 per year, this investment should exceed a value of 500,000 by the time you retire in 40 years.
 
  Indicate whether the statement is true or false.

Question 2

You win the 5,000,000 lottery that pays you 250,000 per year over a 20-year period. Given negative interest rates, the lottery has a present value that is less than 5,000,000.
 
  Indicate whether the statement is true or false.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

bulacsom

  • Sr. Member
  • ****
  • Posts: 329
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: FALSE
Explanation: FV = PV  (1 + r)n = 5,000  (1.1)40 = 226,296.28.

Answer to Question 2

Answer: FALSE
Explanation: You win the 5,000,000 lottery that pays you 250,000 per year over a 20 year period. Given negative interest rates, the lottery has a present value that is GREATER than 5,000,000.


nevelica

  • Hero Member
  • *****
  • Posts: 563
Reply #2 on: Jul 10, 2018
Thank you


bulacsom

  • Sr. Member
  • ****
  • Posts: 329
Reply #3 on: Jul 10, 2018
No problemo


« previous next »
 

Did you know?

GI conditions that will keep you out of the U.S. armed services include ulcers, varices, fistulas, esophagitis, gastritis, congenital abnormalities, inflammatory bowel disease, enteritis, colitis, proctitis, duodenal diverticula, malabsorption syndromes, hepatitis, cirrhosis, cysts, abscesses, pancreatitis, polyps, certain hemorrhoids, splenomegaly, hernias, recent abdominal surgery, GI bypass or stomach stapling, and artificial GI openings.

Did you know?

The B-complex vitamins and vitamin C are not stored in the body and must be replaced each day.

Did you know?

Though newer “smart” infusion pumps are increasingly becoming more sophisticated, they cannot prevent all programming and administration errors. Health care professionals that use smart infusion pumps must still practice the rights of medication administration and have other professionals double-check all high-risk infusions.

Did you know?

HIV testing reach is still limited. An estimated 40% of people with HIV (more than 14 million) remain undiagnosed and do not know their infection status.

Did you know?

According to animal studies, the typical American diet is damaging to the liver and may result in allergies, low energy, digestive problems, and a lack of ability to detoxify harmful substances.

A nurse adjusts the rate of a client’s IV. A nurse adjusts the rate of a client’s IV.
Static Stability & Environmental Lapse Rate Static Stability & Environmental Lapse Rate
Advection of an air mass with a different ELR (environmental lapse rate). Advection of an air mass with a different ELR (environmental lapse rate).
You deposit $2000 each year into an account earning 4% interest compounded annually. How much ... You deposit $2000 each year into an account earning 4% interest compounded annually. How much ...
Dragon Chinese new year 2023 Dragon Chinese new year 2023
Compute the rate of discount allowed on a rotor-tiller that lists for $341.00 and is sold for ... Compute the rate of discount allowed on a rotor-tiller that lists for $341.00 and is sold for ...
Video: Random alignment at Metaphase I Animation

For a complete list of videos, visit our video library