MATH HOMEWORK URGENT!!!!
Ricardo2222
Math 034 First Letter of Last Name Homework #8 Full Name ___________________________ Due Wednesday 11/4/15 Section _____________________________
1. (Section 7.3) On the basis of how long he has until retirement and his comfort with investment risk, Bill has decided that he wants to allocate the money in his retirement account as follows: 70% to equities, 25% to fixed income, and 5% to cash.
a. If he assumes that each asset class provides the low end of the rates of return shown in the table in Example #1 in the PowerPoint slides from Section 7.3, what overall rate of return would he expect to earn over the long term?
b. If he assumes that each asset class provides the high end rate of return, what overall rate of return would he expect to earn over the long term?
2. (Section 7.3) The Northern Tier Real Estate Fund has $84,324,980 in assets and 1,009,880 shares. If Ruth owns
76.387 shares of this fund, what is the value of her investment?
3. (Section 7.3) The net asset value of a mutual fund is $139.56. The fund charges a 2% load. How many shares will you own if you invest $11,000 in this fund?
4. (Section 7.3) One November 1, 2009, the net asset value of the Phillips International Fund was $52.43. On November 1, 2015, the net asset value was $28.12. If all dividends were reinvested, each share of the fund on November 1, 2009 would have grown to 2.486 shares on November 1, 2015. Calculate the average annual rate of return.
5. (Section 7.3) A mutual fund had annual returns of +10%, +9%, -4%, -8%, and +3% in each of the past 5 years. What was the average rate of return over this period?
6. (Section 7.3) Two years ago, an investment you made in a mutual fund was worth $7,500.00. Today it is worth $6,195.35. When you complain to your fund manager, he indicates that your annual rate of return for the year that just ended was 8%. Calculate your annual rate of return for the first year.
7. (Section 8.1) The company you work for provides a lifetime income to its employees on retirement at age 65. The formula provides 2% for each year of service of the average of the employee’s earnings for the last 3 years on the job, up to a maximum of 75%. Your company offers employees the choice to retire as early as age 60 or as late as age 72. Those retiring before age 65 have their calculated benefit reduced by 2.4% for each year they retire prior to age 65; those retiring later have their benefit increased by 2.2% for each year beyond age 65 that they work.
a. Suppose you plan to retire this year at age 61. You have 26 years of service to the company and your last 3 years’ earnings were $55,785, $59,840, and $60,565. Calculate your pension benefit.
b. Suppose you plan to retire this year at age 70. You have 40 years of service to the company and your last 3 years’ earnings were $67,654, $69,450, and $74,820. Calculate your pension benefit.
8. (Section 8.1) The company that Renee works for contributes 9% of each employee’s annual earnings to a defined contribution plan, provided that the employee contributes at least 6%. Renee earns $47,750 per year. How much will go into her retirement account this year if she contributes:
a. 4% of her income? b. 8% of her income?
9. (Section 8.1) Jana is leaving her job after working for her company for 5 ½ years. She has contributed a total of
$24,684.13 to her retirement account. The total amount in her retirement account is $38,987.84. Using the vesting table found in Example #6 in the PowerPoint slides for Section 8.1, find her vested balance in this plan.