Disadvantages of investing in stock market long term

Assignment Help Business Management
Reference no: EM1319989

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.

Reference no: EM1319989


Write a Review


Business Management Questions & Answers

  Labour used in production

All of the subsequent are physical resources EXCEPT • Raw materials • A robotic welder • Labour used in production • An inventory of finished goods • An office building

  Organisational performance

managerial leadership behaviour, importance of organisational culture for effectual organisational performance, formal and the informal organisation, motivation for staff to work well

  Complicated procedures in light of the theories of supply

Not only do several regulators have to approve a new regulation, however comments and reviews from industry and conservation organizations are typical. Explain these complicated procedures in light of the theories of supply and demand for regulati..

  Addresses also includes the elements

Qualitative, Quantitative, also Mixed Methods Approaches, write an Introduction that addresses also includes the elements suggested by this week's Resources of learning.

  Specify several advantages of operating a small business

From the-Activity, compare and contrast the manner in which VectorCal and other businesses that you researched analyze overhead costs. Specify several advantages of operating a small business when it comes to General and Administrative (G&A) expenses..

  Perform an analysis of panera bread company

You are to perform an analysis of Panera Bread Company in 2012.

  Guest services techniques

Customer service is all about building relationships with your customer base

  Benefits package will align with the hrm strategy

Define how the competitive compensation as well as benefits package will align with the HRM strategy

  Microsoft hope its new way of organizing

In Illustrate ways does Microsoft hope its new way of organizing will help it to continually improve its competences also technology.

  Health insurance in america

Health insurance in America was forever changed by the development of managed care organizations in the 1970s. Briefly trace the development of managed care from the HMO Act of 1973 moving forward.

  Did the wentzes do under the contract

Did the Wentzes do under the contract Did the court find exact performance to be an adequate legal remedy in this case Why did the court waste to help Campbell in enforcing its legal contract

  Key diversity concerns for country

Choose a country other than the United States, and document the key diversity concerns for that country. Which groups are dominant, and which are non-dominant?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd