What is dollar today worth considering

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Reference no: EM131347271

You are getting ready to retire and are taking a look at your retirement investments.

You have mostly ignored $100,000 investment you inherited from a distant relative 30 Years ago. Recently you were reading over an investment report from your stockbroker related to another investment you have. In it a statement was made that over the last 40 years inflation has run on average of 3.5% per year, while the average stock market return has been 11% per year. You wondered what the average rate of return has been for the investment where you placed your inherited money. You presently have $250,000 in the account.

Your task is to answer the following questions in an analysis paper not to exceed 2 pages.

1. What is a dollar today worth considering what a dollar was worth 30 years ago?

2. What should you have in your investment account for your inheritance if it keep pace with inflation.

3. Did your investment account keep pace with inflation, if not why?

4. What was your real rate of return in the investment account?

5. If you desired to earn a real rate of return of 5% what should your account have yielded per year to account for inflation?

Reference no: EM131347271

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