$4,215 (1.1142 - 1.0342)/(0.11 -0.03) = $4,037,278.36 Which of the following statements may explain this formula?...

 

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$4,215 (1.1142 - 1.0342)/(0.11 -0.03) = $4,037,278.36 Which of the following statements may explain this formula? O You invest $4,215 this year, and increase this investment by 3% per-year, so you end up with just over $4m in your account in forty-two years given your securities yield 11% annually. O You invest $4,215 per-year into an account, which yields 11% annually; this is above the risk free rate (i.e. 3% ). In forty-two years you will have just over $4m in this account. O Just over $4m is needed today to fund monthly inflation-adjusted payments (Payment 1: $4,215) that will last forty-two years given an 11% yield and given inflation is expected to run at 3% annually. O You put $4,215 into an account this year and each year for 42 years this contribution will be increased by 8%. This will create just over $4m in wealth in forty-two years. $4,215 (1.1142 - 1.0342)/(0.11 -0.03) = $4,037,278.36 Which of the following statements may explain this formula? O You invest $4,215 this year, and increase this investment by 3% per-year, so you end up with just over $4m in your account in forty-two years given your securities yield 11% annually. O You invest $4,215 per-year into an account, which yields 11% annually; this is above the risk free rate (i.e. 3% ). In forty-two years you will have just over $4m in this account. O Just over $4m is needed today to fund monthly inflation-adjusted payments (Payment 1: $4,215) that will last forty-two years given an 11% yield and given inflation is expected to run at 3% annually. O You put $4,215 into an account this year and each year for 42 years this contribution will be increased by 8%. This will create just over $4m in wealth in forty-two years.

Answer rating: 100% (QA)

Answer 1 You invest 4215 this year and increase this investment by 3 peryear so you end up with just over 4m in your account in fortytwo years given y... View the full answer