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Alona [7]
3 years ago
5

Janice would like to send her parents on a cruise for their 25th wedding anniversary. She has priced the cruise at $15,000 and s

he has 5 years to accumulate this money. How much must Janice deposit annually in an account paying 10 percent interest in order to have enough money to send her parents on the cruise
Business
1 answer:
pochemuha3 years ago
3 0

Answer:

Annual deposit= $2,456.96

Explanation:

Giving the following information:

The number of years= 5 years

Final value= $15,000

Interest rate= 10%

We need to calculate the annual deposit to reach the objective. We will use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (15,000*0.1) / [(1.10^5)-1]

A= $2,456.96

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12.5%

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A portfolio has $2,800 invested in stock A

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The expected return of stock A is 9%

= 9/100

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= 15/100

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The first step is to calculate the total value

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Therefore, the expected return on the portfolio can be calculated as follows

= (2,800/6,700)×0.09 + (3,900/6,700)×0.15

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