Mark saves a fixed percentage of his salary throughout each year. This year he saved $1500. For the next 5 years, he expects his salary to increase at an 8% annual rate, and he plans to increase his savings at the same 8% annual rate. He invests his money evenly twice a year in the stock market. There thus will be six midyear investments and six end of year investments. Solve the problem by using the geometric gradient factor. 2. How much will the investment be worth at the end of the six years if they increase in the stock market at a 8% annual rate? Select one: a. $12,911 b. $13,299 c. $13,224 d. $13,512
Mark saves a fixed percentage of his salary throughout each year. This year he saved $1500. For the next 5 years, he expects his salary to increase at an 8% annual rate, and he plans to increase his savings at the same 8% annual rate. He invests his money evenly twice a year in the stock market. There thus will be six midyear investments and six end of year investments. Solve the problem by using the geometric gradient factor. 2. How much will the investment be worth at the end of the six years if they increase in the stock market at a 8% annual rate? Select one: a. $12,911 b. $13,299 c. $13,224 d. $13,512
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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Mark saves a fixed percentage of his salary throughout each year. This year he saved $1500. For the next 5 years, he expects his salary to increase at an 8% annual rate, and he plans to increase his savings at the same 8% annual rate. He invests his money evenly twice a year in the stock market. There thus will be six midyear investments and six end of year investments. Solve the problem by using the geometric gradient factor. 2. How much will the investment be worth at the end of the six years if they increase in the stock market at a 8% annual rate? Select one:
a. $12,911
b. $13,299
c. $13,224
d. $13,512
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