Barry and Gary have an Uncle Larry. When Barry was born, Uncle Larry gave him 100 shares of stock in GTX Corp, the price of the stock was $10.00/share, and it has returned 8% annually. Uncle Larry has been giving Gary $100 on his birthday and each year since his birth, which he has invested at 7.5% a year. Today, Barry and Gary turned 30, and Gary received his last birthday gift from Uncle Larry. Neither of them has saved any other money. Interest rates are annually compounded. Carefully answer the following questions.

a) (5 points) How much money does Barry have today?

b) (6 points) How much money does Gary have today?

c) (6 points) How much money would Barry have needed to invest extra into the stock of TX Corp. per year to have as much as Gary? Assume Barry would have set aside an equal amount of money every year starting at the age of one with a last payment when he would turn 30 (a total of 30 payments) at 8% a year.

Answer rating: 100% (QA)

a To calculate how much money Barry has today we need to calculate the future value of the 100 share... View the full answer