How sensitive is the calculation to the rate of return

Assignment Help Microeconomics

Reference no: EM13686391

Presume that you have saved $10,000 for retirement and are currently 20 years old. Moreover, suppose that you will earn the historical return of about six percent on your portfolio of stocks. Consider how the balance in your retirement account evolves as you age under different assumptions below. (Using a spreadsheet program like Excel will make the analysis easier.)

1. Plot your retirement account balance by year for these three scenarios on a standard scale.

2. Do the same calculations for rates of return of 4% and 8%. How sensitive is the calculation to the rate of return?

3. Compute the balance in your retirement account when you will be 25, 30, 40, 50, and 65 years old assuming that there are no deposits or withdrawals.

4. Plot the same thing with a ratio scale.

Reference no: EM13686391

Questions Cloud

Determine what is his heartbeat rate : A spaceship approaches the earth with a speed 0.50c. A passenger in the spaceship measures his heartbeat as 70 beats per minute. Determine what is his heartbeat rate

Explain dual signature used in set protocol : Explain dual signature used in SET (Secure Electronic Transfer) protocol and provide example.

Firm specific assets-costs or measuring quality : Firm specific assets, costs or measuring quality, externalities, and coordination problems all may militate against: A) vertical integration. B) Long term markets. C) Open markets. D) Efficient production methods.

Determine the element atomic mass number : An element in its solid phase has a mass density of 1650 kg/m3 and number density 3.83 x 1028 atoms/m3. Determine the element atomic mass number

How sensitive is the calculation to the rate of return : Presume that you have saved $10,000 for retirement and are currently 20 years old. Moreover, suppose that you will earn the historical return of about six percent on your portfolio of stocks. How sensitive is the calculation to the rate of return?

Determine the total binding energy : Determine the total binding energy, and the binding energy per nucleon, for 195/78Pt. The mass of the atom is 194.964774 u

Evaluate what the focal length of the mirror : An object is located 12 centimeter in front of a curved mirror. The magnification of the image is -3.0. Evaluate what the focal length of the mirror

Estimate the weight of a jetliner : The Mariana trench is located in the Pacific Ocean at a depth of about 11,000 meter below the surface of the water. estimate the weight of a jetliner whose mass is 4.21 x 105 kilogram

Corporate governance refers to aspects of the corporation : "Corporate governance" refers to aspects of the corporation such as:

User Account

All Pages