Small company stocks rather than t-bills

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Reference no: EM13974592

Task 1 The historical average return on U.S. T-bills is 3.8% per year, while the average return for small company stocks is 16.9% per year. Assuming these rates occur annually in the future, how much more cash would you have in 20 years by investing $50,000 in small company stocks rather than T-bills?

Task 2 Your daughter is currently 8 years old. You anticipate that she will be going to college in 10 years. You would like to have $100,000 in a savings account at that time. If the account promises to pay a fixed interest rate of 3% per year, how much money do you need to put into the account today to ensure that you will have $100,000 in ten years?

Reference no: EM13974592

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