Answer:
Client #007
The client's calculated return need is:
= $
Explanation:
a) Data and Calculations:
Value of portfolio = $1,100,000
Estimated value of portfolio in 5 years = $1,200,000
Expected returns in 5 years = $100,000 ($1,200,000 = $1,100,000)
This translates to 9.1% ($100,000/$1,100,000 * 100)
Annual rate of return = 1.82% (9.1/5)
Client's need = $15,000
Client's need after considering inflation rate of 3%
The client's calculated return need = $1,100,000 * 9.1% * 1.16
= $116,116
