Alan inherited $100,000 with the stipulation that he"invest it to financially benefit his family." Alan and his wife Alice decided they would invest the inheritance to help them accomplish two financial goals: purchasing a Park City vacation home and saving for their son Cooper's education.  INVESTMENT: Initial Investment; Investment horizon  VACATION HOME: $50,000; 5 years  COOPER'S EDUCATION: $50,000; 18 years. Alan and Alice have a marginal income tax rate of 32 percent (capital gains rate of 15 percent) and have decided to investigate the following investment opportunities.  Growth Stock: 5 years, Future Value = $$65,000: What is the Annual After-Tax Rate of Return: _____________% : 18 years, Future Value = $140,000:  What is the Annual After-Tax Rate of Return: _____________%

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
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Alan inherited $100,000 with the stipulation that he"invest it to financially benefit his family." Alan and his wife Alice decided they would invest the inheritance to help them accomplish two financial goals: purchasing a Park City vacation home and saving for their son Cooper's education.  INVESTMENT: Initial Investment; Investment horizon  VACATION HOME: $50,000; 5 years  COOPER'S EDUCATION: $50,000; 18 years. Alan and Alice have a marginal income tax rate of 32 percent (capital gains rate of 15 percent) and have decided to investigate the following investment opportunities.  Growth Stock: 5 years, Future Value = $$65,000: What is the Annual After-Tax Rate of Return: _____________% : 18 years, Future Value = $140,000:  What is the Annual After-Tax Rate of Return: _____________%

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