The following table shows the average returns for some of the largest mutual funds commonly found in retirement plans. (Assume end-of-month deposits and withdrawals and monthly compounding, and assume that the quoted rate of return continues indefinitely.) Mutual Fund Fidelity Growth Company Vanguard PIMCO Vanguard Total Bond 500 Index Total Return Market Index Rate of Return 15.83% 13.25% 2.77% 3.67% Туре Stock fund Stock fund Bond fund Bond fund You wish to establish a trust fund from which your heirs can withdraw $10,000 per month for 20 years, at the end of which time they will receive $20,000. How large should the trust be if invested in the Fidelity stock fund? HINT [See Example 3.) (Round your answer to the nearest cent.)
The following table shows the average returns for some of the largest mutual funds commonly found in retirement plans. (Assume end-of-month deposits and withdrawals and monthly compounding, and assume that the quoted rate of return continues indefinitely.) Mutual Fund Fidelity Growth Company Vanguard PIMCO Vanguard Total Bond 500 Index Total Return Market Index Rate of Return 15.83% 13.25% 2.77% 3.67% Туре Stock fund Stock fund Bond fund Bond fund You wish to establish a trust fund from which your heirs can withdraw $10,000 per month for 20 years, at the end of which time they will receive $20,000. How large should the trust be if invested in the Fidelity stock fund? HINT [See Example 3.) (Round your answer to the nearest cent.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![The following table shows the average returns for some of the largest mutual funds commonly found in retirement plans.
(Assume end-of-month deposits and withdrawals and monthly compounding, and assume that the quoted rate of return
continues indefinitely.)
Mutual
Fund
Fidelity
Growth
Vanguard
PIMCO
500 Index Total Return
Company
Vanguard
Total Bond
Market Index
Rate of
Return
15.83%
13.25%
2.77%
3.67%
Туре
Stock fund Stock fund
Bond fund
Bond fund
You wish to establish a trust fund from which your heirs can withdraw $10,000 per month for 20 years, at the end of which
time they will receive $20,000. How large should the trust be if invested in the Fidelity stock fund? HINT [See Example 3.]
(Round your answer to the nearest cent.)
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F92e2b478-0368-4e40-bb41-2c896b91d975%2Fd689b3c5-f5ca-446c-906f-0f0e4574b3e4%2Fpirbd7t_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The following table shows the average returns for some of the largest mutual funds commonly found in retirement plans.
(Assume end-of-month deposits and withdrawals and monthly compounding, and assume that the quoted rate of return
continues indefinitely.)
Mutual
Fund
Fidelity
Growth
Vanguard
PIMCO
500 Index Total Return
Company
Vanguard
Total Bond
Market Index
Rate of
Return
15.83%
13.25%
2.77%
3.67%
Туре
Stock fund Stock fund
Bond fund
Bond fund
You wish to establish a trust fund from which your heirs can withdraw $10,000 per month for 20 years, at the end of which
time they will receive $20,000. How large should the trust be if invested in the Fidelity stock fund? HINT [See Example 3.]
(Round your answer to the nearest cent.)
$
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