Annual rate of return

Assignment Help Finance Basics
Reference no: EM131923377

It is December 20th and you just met with your financial advisor, who suggested that you begin putting $5,000 into a Roth IRA at the beginning of each year, starting next month.

Your advisor says that, although there is no guarantee, you could average an annual return of 8% over the next twenty (20) years with the right mix of investments. You want to know just how big of a "nest egg" you can create if you take her advice and then actually average an 8% annual rate of return.

(A) How big will your nest egg be at the end of the year in which you make your 20th annual contribution?

(B) How big will your nest egg be at the end of the year in which you make your 20th annual contribution if you invest at the end of each year instead of at the beginning of each year as your advisor recommends?

Reference no: EM131923377

Questions Cloud

Describe the impact of a payroll tax on wages and employment : Describe the impact of a payroll tax on wages and employment in a competitive industry. Why is part of the tax shifted to workers?
What is the geometric return for the stock : A stock has had returns of -18.8 percent, 29.29 percent, 21.6 percent, -9.9 percent, 34.6 percent, and 26.8 percent over the last six years.
What uk professions are likely to experience increased : What UK professions are likely to experience increased opportunities on the Continent as a result of the 1992 measures aimed at 'freeing the labor market?
How many yen could one us dollar : Suppose that 144 yen could be purchased in the foreign exchange market for one U.S. dollars today. If the yen is expected to depreciate by 8 percent tomorrow.
Annual rate of return : It is December 20th and you just met with your financial advisor, who suggested that you begin putting $5,000 into a Roth IRA at the beginning of each year
Which option will reduce your annual income taxes : You are in the 25% marginal tax bracket. You have the option of deducting $2,000 as an "adjustment to income" on the front page of Form 1040, or you can take.
Which uk industries do you consider most likely to benefit : Which UK industries do you consider most likely to benefit from the 1992 changes, and which could be adversely affected? Explain your answers.
What political and economic reasons can you think : What political and economic reasons can you think of to account for this? Is full economic union in Europe possible without monetary union?
Calculate amount of freight-in reported by jackson company : Jackson Company reported the following information relating to its inventory: purchases - $62,000, Calculate amount of freight-in reported by Jackson Company

Reviews

Write a Review

Finance Basics Questions & Answers

  Which one would you have the most confidence

One person is your current roommate, the second person is a professional security analyst with an excellent reputation on Wall Street, and the third person is Company Xs CFO. If the three estimates differed, in which one would you have the most confi..

  Why are more funds from property and casualty insurance

why are more funds from property and casualty insurance companies than funds from life insurance companies invested in

  Find what will the portfolio new beta

What will the portfolio's new beta be after these transactions? Do not round intermediate calculations. Round your answer to two decimal places.

  The earnings dividends and stock price of shelby inc arc

the earnings dividends and stock price of shelby inc. arc expected to grow at 7 per year in the future. shelbys common

  Null and alternate hypothesis for one of issues

What situations exist where a multiple (more than two) group comparison would be appropriate? (Note: Situations could relate to your work, home life, social groups, etc.). Create a null and alternate hypothesis for one of these issues. What woul..

  Which of the given definitions of the money supply

Money market funds are not included in which of the following definitions of the money supply?

  Convert its overall position to the one desired

Show how it can use currency and equity swaps to maintain its position in the plain vanilla euro swap and convert its overall position to the one desired.

  Which bank should vegit use for the loan

The loan offered by Bank of Florida has a 12.5 percent simple interest rate with annual interest payments, whereas the loan offered by the Bank of Georgia has a 12 percent simple interest rate with monthly payments. Which bank should Vegit use for..

  Describe a zero-duration hedging strategy

Describe a zero-duration hedging strategy using only the government bond portfolio and options on U.S. Treasury

  Describe the difference between free trade area

Describe the difference between free trade area, customs union, common market, and political union.

  What was its basic earning power ratio

X-1 Corp's total assets at the end of last year were $380,000 and its EBIT was 52,500. What was its basic earning power (BEP) ratio?

  Deliver and evaluate a global talent management strategy

How does an organization design, deliver and evaluate a global talent management strategy?- Which talent management indicators would you include in the Standard Chartered's human capital scorecard?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd