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 126 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?

According to the American College of Allergy, Asthma & Immunology, more than 50 million Americans have some kind of food allergy. Food allergies affect between 4 and 6% of children, and 4% of adults, according to the CDC. The most common food allergies include shellfish, peanuts, walnuts, fish, eggs, milk, and soy.

Did you know?

Asthma-like symptoms were first recorded about 3,500 years ago in Egypt. The first manuscript specifically written about asthma was in the year 1190, describing a condition characterized by sudden breathlessness. The treatments listed in this manuscript include chicken soup, herbs, and sexual abstinence.

Did you know?

Urine turns bright yellow if larger than normal amounts of certain substances are consumed; one of these substances is asparagus.

Did you know?

The human body's pharmacokinetics are quite varied. Our hair holds onto drugs longer than our urine, blood, or saliva. For example, alcohol can be detected in the hair for up to 90 days after it was consumed. The same is true for marijuana, cocaine, ecstasy, heroin, methamphetamine, and nicotine.

Did you know?

Certain topical medications such as clotrimazole and betamethasone are not approved for use in children younger than 12 years of age. They must be used very cautiously, as directed by a doctor, to treat any child. Children have a much greater response to topical steroid medications.

In the past year, about one in five adults in the United States reported symptoms of anxiety ... In the past year, about one in five adults in the United States reported symptoms of anxiety ...
Cranial polarization. Lightly place both thumbs on the anterior fontanel, with both index fingers ... Cranial polarization. Lightly place both thumbs on the anterior fontanel, with both index fingers ...
How to solve rate problems leading to fractional equations (Question 2) How to solve rate problems leading to fractional equations (Question 2)
Income per Capita versus Total Fertility Rate Income per Capita versus Total Fertility Rate
If a graph has the following x-intercepts, which value of x is the instantaneous rate of change ... If a graph has the following x-intercepts, which value of x is the instantaneous rate of change ...
A promissory note has a face value of $6000 and it has a date of issue of June 1 this year. The ... A promissory note has a face value of $6000 and it has a date of issue of June 1 this year. The ...
Video: Optic Nerve and Optic Disk Animation (Part 1 of 2)

For a complete list of videos, visit our video library