You inherited 100 ounces of silver from your grandfather exactly 10 years ago when it was worth
Question:
You inherited 100 ounces of silver from your grandfather exactly 10 years ago when it was worth $35.00 per ounce. You immediately sold the silver and put the proceeds into a bank account that earned 2.5% per year and that was a good thing because silver prices have declined since then. 5 years from now, you want to have $10,000.00 worth of gold in your portfolio of assets. Today, you withdraw and use all the money from the inheritance bank account to purchase gold that you expect will appreciate by 5% per year on average. You realize you don't have enough money from the inheritance account alone to buy the required amount of gold today if it only appreciates by 5% per year. How much additional money (more than the proceeds from your inheritance account) will you need to invest in the gold today in order to have $10,000 worth of gold in 5 years assuming it appreciates by 5% per year?
South Western Federal Taxation 2015
ISBN: 9781305310810
38th Edition
Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young