Reference no: EM133097264

Questions -

Q1. A broker friend of yours wants you to deposit your money with his firm's money market account. You have $12,000 today. Your friend says that if you deposit the $12,000 and a yearly deposit of $15,000, his firm can convert it into $2.5 million dollars within 25 years. What rate will your money market have to earn to be able to achieve this?

11.56%

8.75%

10.24%

12.78%

Q2. You have $25,000 today. If you can deposit the funds in a money market account along with yearly deposits of $12,000, what rate should it earn in the least to allow you to retire in 40 years with $1.25M?

3.967%

2.564%

4.563%

5.674%

Q3. Mary has inherited money, and would like to go on vacation and also use some for retirement. She believes in her working life of 35 years, she should be able to save $6,000 every year which she plans to deposit in a money market account earning 6.5%. She would at least like to have $1.5 million when she retires. How much of her inheritance should she transfer into her money market account to be able to achieve her goal?

$45,800

$25,600

$83,400

$124,240

Q4. Say you are starting your working life today with a bank account of $2,500 that earns a compound interest rate of 3.5%, and can manage to save $6,000 every year. What amount would you have saved if you worked for 45 years?

$456,765

$345,567

$646,446

$765,456