# Question

Amanda has 30 years to save for her retirement. At the beginning of each year, she puts $5000 into her retirement account. At any point in time, all of Amandaâ€™s retirement funds are tied up in the stock market. Suppose the annual return on stocks follows a normal distribution with mean 12% and standard deviation 25%. What is the probability that at the end of 30 years, Amanda will have reached her goal of having $1,000,000 for retirement? Assume that if Amanda reaches her goal before 30 years, she will stop investing.

## Answer to relevant Questions

In the financial world, there are many types of complex instruments called derivatives that derive their value from the value of an underlying asset. Consider the following simple derivative. A stockâ€™s current price is $80 ...The customer loyalty model in Example 16.7 assumes that once a customer leaves (becomes disloyal), that customer never becomes loyal again. Assume instead that there are two probabilities that drive the model, the retention ...Based on Morrison and Wheat (1984). When his team is behind late in the game, a hockey coach usually waits until there is one minute left before pulling the goalie out of the game. Using simulation, it is possible to show ...Consider a device that requires two batteries to function. If either of these batteries dies, the device will not work. Currently there are two new batteries in the device, and there are three extra new batteries. Each ...Play Things is developing a new Hannah Montana doll. The company has made the following assumptions:â€¢ The doll will sell for a random number of years from 1 to 10. Each of these 10 possibilities is equally likely. â€¢ At ...Post your question

0