Disadvantages of investing in stock market long term
Course:- Business Management
Reference No.:- EM1319989

Assignment Help
Assignment Help >> Business Management

1. Two people, Ella and Jane, decide to start saving for retirement. Ella decides to invest $4000 a year into an annuity at the age of 25. At the age of 35 she stops making investments and just leaves the money there. Jane on the other hand, decides to start investing $4000 a year at the age of 40 and invests that money for every year thereafter. Assuming both retire at 70, and that the interest rate both get on their investments is 10% (compounded annually) who has the most money in their account at age 70? Explain why you pick the answer you pick. 

2. At the age of 30 you decide to start saving money. At first you can only afford to deposit $200 per month. However, at the age of 38 you are able to deposit $300 per month. Then at the age of 45 you raise your monthly deposit again to $500 per month. Finally at the age of 50 you get promoted to president of the company and are able to deposit $2000 per month into the account. Assuming your account is earning (prime interest rate + 4%) in interest, compounded monthly, how much do you have in your account at the age of 70? Hint: Treat each time that you change the deposit amount as a separate annuity, and compute the future value (FV) on each annuity separately. Assume that each annuity earns compound interest during the time it is not receiving deposits. 

3. It is commonly assumed that the stock market yields a 10% rate or return (on average) on investments made in the market long term. Write an essay looking at the advantages and disadvantages of investing in the stock market long term.

Ask Question & Get Answers from Experts
Browse some more (Business Management) Materials
When public service organizations seem overextended where would the public turn for assistance?
Discounts Corporation is a producer of power engines. The biggest sellers they have are the Holiday and the Special. The Holiday sells for $50 and requires eighty ounces of ma
Give examples of firms that did not understand their external environment and what were the implications of the firm's failure to understand that environment?
do not transition from physical stores to online shopping very well. Examine the pros and cons of the two forms of retailing and the possible target markets for each.
Discuss the defenses available to the employer under Respondeat Superior.
Describe what you think airlines should develop to measure performance. Be sure to describe how this data would be collected.
The Taguchi Quality Loss Function implies that a customer's dissatisfaction increases geometrically as the actual value deviates from the target value customers satisfaction
You bring up some good points. Let's look at one of your points on when to sell the business. There're some who believe that you sell at top while others believe you sell whi