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Author Question: You made your first 3,000 deposit today into a retirement account earning an average annual rate of ... (Read 124 times)

BrownTown3

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on: Jul 10, 2018
You made your first 3,000 deposit today into a retirement account earning an average annual rate of 6.
 
  How long will it take your deposit to reach a value of 50,000? How long will it take if instead you invest the money into an account earning 10 per year? After making your calculations, how does this information affect your decision-making regarding long-term investments?
  What will be an ideal response?

Question 2

Blue sky laws refer to
 
  A)
 
  state laws protecting investors in intrastate security sales.
  B)
 
  federal laws protecting investors in interstate security sales.
  C)
 
  municipal laws regulating building heights.
  D)
 
  common laws that give shareholders the right to sue fraudulent securities issuers.


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dmurph1496

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Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: n = = = 48.28 years vs. = 29.52 years.
Hopefully, the student will recognize that low interest rates, while often associated with lower-risk investments, have the risk of taking too long to meet future value objectives. With time frames such as in this problem, investors are often willing to invest in higher risk - higher expected return investments.

Answer to Question 2

A


BrownTown3

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Reply #2 on: Jul 10, 2018
Thank you :)


dmurph1496

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Reply #3 on: Jul 10, 2018
Happy to help you


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