After graduating from JCU, David has been working in a local company as a finance manager...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
After graduating from JCU, David has been working in a local company as a finance manager for 2 years. He is currently earning $4,000 per month. Over the last 2 years, he has successfully saved $20,000 in his bank account. However, David is considering to invest his savings to fund for his children's education expenses. He feels that based on the increasing cost of education in Singapore, he will need $200,000 in 6 years to pay off his children overall education fees throughout their primary school period. Assuming David's salary stays constant throughout 6 years from now. a. Based on the past performance of S&P 500 index, David expects an average return of 12% p.a. on his investment. If he decides to invest all his savings in the bank only, how much will he get in 6 years? Will David have $200,000 he needs in 6 years? If not, how much more money will he need today? PV=FV/(1+r); FV-PV(1+r) b. What advices you can give David to achieve his goal in 6 years' time? After graduating from JCU, David has been working in a local company as a finance manager for 2 years. He is currently earning $4,000 per month. Over the last 2 years, he has successfully saved $20,000 in his bank account. However, David is considering to invest his savings to fund for his children's education expenses. He feels that based on the increasing cost of education in Singapore, he will need $200,000 in 6 years to pay off his children overall education fees throughout their primary school period. Assuming David's salary stays constant throughout 6 years from now. a. Based on the past performance of S&P 500 index, David expects an average return of 12% p.a. on his investment. If he decides to invest all his savings in the bank only, how much will he get in 6 years? Will David have $200,000 he needs in 6 years? If not, how much more money will he need today? PV=FV/(1+r); FV-PV(1+r) b. What advices you can give David to achieve his goal in 6 years' time?
Expert Answer:
Answer rating: 100% (QA)
a Over the last 2 years David is able to save 20000 which indicates that each year he can s... View the full answer
Related Book For
Auditing a risk based approach to conducting a quality audit
ISBN: 978-1133939153
9th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg
Posted Date:
Students also viewed these accounting questions
-
David Norris, an engineering student, has been working in a nightclub to earn money to pay for his education. After about eight months, he notices that he is having problems hearing high-pitched...
-
Simon (marketing and sales) has been working in a general partnership (EcoPackaging) with Mary (engineer) and James (designer) for the last four years. The partners came together with the objective...
-
Mr Orlando is a US citizen and has been working in the Finance Department of Clever Inc. in Los Angeles since 2008. In April 2013, he was relocated to the Hong Kong office as the regional financial...
-
A national fast food restaurant chain has recently made the decision that their breakfast menu will now be available all day long. The product management team overseeing the breakfast lines including...
-
One tool of financial analysis is common- size financial statements. Why do you think common-size income statements and balance sheets are used? Note that the accounting statement of cash flows is...
-
Explain why the density of vanadium (6.11 g cm 3 ) is significantly less than that of chromium (7.19 g cm 3 ). Both vanadium and chromium crystallize in a body-centered cubic lattice.
-
In order to determine the unbalance in a grinding wheel, rotating clockwise at \(2400 \mathrm{rpm}\), a vibration analyzer is used and an amplitude of \(0.1 \mathrm{~mm}\) and a phase angle of...
-
The post-closing trial balance of Anderson Company at December 31, 2011, is shown here. During 2012, Anderson Company had the following transactions: a. Inventory purchases were $80,000, all on...
-
Electricity & Magnetism 1. Consider the circuit below: R =24Q www R = 60Q R = 80 a) which resistor would have the greatest current passing through it? Explain. b) Which resistor would have the...
-
Peanut Company acquired 90 percent of Snoopy Company's outstanding common stock for $270,000 on January 1, 20X8, when the book value of Snoopy's net assets was equal to $300,000. Problem 3-34...
-
What lean concept relates to eliminating non-value added steps and waste in a product storage process? How would one use value stream mapping to define the process to eliminate the waste?
-
$50,570 payments to be made at the end of each period for 17 periods at 10%. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) Present value...
-
Loquat County uses a fiscal agent to distribute payments of interest to bondholders. Interest payments are due on July 1 of each year. The fiscal agent requires the county to transfer by June 20 the...
-
EXHIBIT 5.10 Internal Control Questionnaire-Payroll Processing Control Environment 1. Are all employees paid by check or direct deposit? 2. Is a special payroll bank account used? 3. Are payroll...
-
nces Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Hubs Sprockets Unit 0.80 0.40 Annual Production 16,000 units 49,000...
-
Barnum Company acquired several small companies at the end of 2018, and based on the acquisitions, reported the following intangible assets on its December 31, 2018, balance sheet: Patent Trade name...
-
Given the following is a relation with no known repeating groups: PROJECT-TEAMS(pCode, pName, pStart, pEnd, empID, eFName, eLName, jobTitle, empClass, consultRate, projPosition, projHour, projStart,...
-
In Problems 1522, find the principal needed now to get each amount; that is, find the present value. To get $750 after 2 years at 2.5% compounded quarterly.
-
Describe the safeguards to independence articulated in the AICPAs independence conceptual framework, and provide examples of each.
-
Describe common procedures that the auditor will complete when performing a review of interim financial information.
-
Refer to the Auditing in Practice feature, "Deloitte, Ligand, and the PCAOB: A Case where Subsequent Events were Important." How did James Fazio fail in his duty to evaluate subsequent events? What...
-
Reverse-current readings (in nanoamperes) are made at the location of a transistor on an integrated circuit. A sample of size 10 is taken every half hour. Since some of the units may prove to be...
-
In order to establish control charts for an extraction job, 30 samples of five measurements of the extracted ores are taken, and the results are \(\overline{\bar{x}}=25.96\) tons and \(\bar{s}=1.5\)...
-
If the sample standard deviations instead of the sample ranges are used to estimate \(\sigma\), the control limits for the resulting \(\bar{x}\) chart are given by \(\overline{\bar{x}} \pm A_{1}...
Study smarter with the SolutionInn App