1. you wish to deposit $500 per month into an account for 36 months.


1. You wish to defence $500 per month into an sumity for 36 months. Assume your concern reprove is resembling to the earliest-admonish concern reprove.

 

            a) How greatly do you accept (total) in the sumity succeeding 36 months?

 

            b) How greatly of that sum is concern?

 

Question 2

(10 points)

2. Two persons, Ella and Jane, flow to set-on-foot sparing for recess. Ella flows to endue $4000 a year into an annuity at the age of 25. At the age of 35 she stops making enduements and fitting leaves the specie there. Jane on the other agency, flows to set-on-foot endueing $4000 a year at the age of 40 and endues that specie for whole year thereafter. Assuming twain depart at 70, and that the concern reprove twain get on their enduements is 10% (compounded year-by-year) who has the most specie in their sumity at age 70? Explain why you extract the retort you extract.

 

Question 3

(10 points)

3. At the age of 30 you flow to set-on-foot sparing specie. At earliest you can singly supply to defence $200 per month. However, at the age of 38 you are operative to defence $300 per month. Then at the age of 45 you discipline your monthly defence anew to $500 per month. Finally at the age of 50 you get promoted to moderator of the community and are operative to defence $2000 per month into the sumity. Assuming your sumity is earning (first-admonish concern reprove + 4%) in concern, combinationed monthly, how greatly do you accept in your sumity at the age of 70? Hint: Treat each engagement that you modify the defence aggregate as a sepereprove annuity, and scold the advenient estimate (FV) on each annuity seperately. Assume that each annuity earns combination concern during the engagement it is not receiving defences.

 

Essay

(15 points)

4. It is commsingly productive that the store dispense yields a 10% reprove or revert (on middle) on enduements made in the dispense crave engagement. Write an essay looking at the advantages and disadvantages of endueing in the store dispense crave engagement.