Question

1. What are the balances for each type of investment at the end of the third year?

Answer 1

You saved $20,000.00 and want to diversify your monies. You invest 45% in a Treasury bond for 3 years at 4.35% APR compounded annually. You place 15% in a CD at 3.75% APR for 3 years compounded annually. 20% you invest in a stock plan and the remainder is in a savings account at 2.90% APR compounded annually. The stock plan increases 8% the first year, decreases in value by 4% the second year, and increases by 6% the third year.

1. What are the balances for each type of investment at the end of the third year?

Answer 2

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Answer 3

You saved $20,000.00 and want to diversify your monies. You invest 45% in a Treasury bond for 3 years at 4.35% APR compounded annually. You place 15% in a CD at 3.75% APR for 3 years compounded annually. 20% you invest in a stock plan and the remainder is in a savings account at 2.90% APR compounded annually. The stock plan increases 8% the first year, decreases in value by 4% the second year, and increases by 6% the third year.

1. What are the balances for each type of investment at the end of the third year?

Answer 4

please respond

Answer 5

You keep tagging a lot of people. It's not really nice because it bothers some people. :)

Answer 6

i don't understand how to do this
so that is why i asked this question
please respond

Answer 7

@ everybody! LOL

You are going to have to break it up into the three groups and each group has a different calculation that will be performed on it. This is like... 12 different calculations or some other fun number like that.

Answer 8

?

Answer 9

You invest 45% in a Treasury bond for 3 years at 4.35% APR compounded annually.
Find 45% of 20000

Answer 10

9000

Answer 11

So figure out what 9000 is worth after 3 years compounded annually at 4.35%
Use your formula:
\[A=A _{0}(1+\frac{r}{n})^{nt}\]

Answer 12

?

Answer 13

And that is just the answer to the first 45%. That is what I meant by 3 groups.... but there is actually a 4th. The remainer in a savings plan.

Does your book have an iterest formula? That is what Mertsj put there, but your book's might put it a little differently.

Answer 14

\[A=9000(1+\frac{.0435}{1})^{1(3)}\]

Answer 15

?

Answer 16

What does ? mean? What are you asking about?

Answer 17

You know, I have given you the formula, substituted the numbers in properly. If you cannot enter it into your calculator and evaluate it, I really cannot help you. Sorry

Answer 18

A=A0(1+r/n)nt i never seen it before

Answer 19

What formula do you usually use?

Answer 20

That is an interest formula. Do you have one in your book? It should be similar.

Answer 21

no it is not in the book

Answer 22

So somebody just threw this problem out there with no explanation or tools to use?

Answer 23

\[A=A _{0}\left(1+\frac{r}{n}\right)^{nt}\]Where:
A is the amount at the end of the investment period.
\(A _{0}\) is the amount at the end of the start period.
r is the rate of interest in decimals, not percentage!
n is the number of compounding periods per year, so 1 for annual, 4 for quarterly, etc.
t is the time in years.

Now, do you see how Mertsj filled this in with number to make that first equation?

Answer 24

Doh!
\(A _{0}\) is the amount at the start of the period.

I meant to put that in there that way. LOL

Answer 25

I don't think the student is able to follow what is going on … can we somewhat water the jargon down?

Answer 26

@nincompoop We gave a formula, then an explanation of the formula when he did not get the formula. Then we got nothing. I would gladly explain more, if I knew for certain that more explanation was needed. Otherwise, I am typing in tons of information for someone that as far as I know is done with this.

On top of that, the system has also been going up and down a lot. The person may not even have been able to read the explanation yet. Piling on more and more without knowing they have had a chance to absorb the next piece is another disservice to them.

Those are both reasons to stop until the person asks for more.

Answer 27

fair enough :)

Answer 28

@jeanettecrisman101 I see that people have devoted quite some time trying to help you with this compounded problem. It would be nice to perhaps be responsive to their post and communicate if you are able to follow, you are lost in translation, or just don't have a clue from the get go.

Answer 29

@jeanettecrisman101 did you ever figure out how to do this? I need help and none of those post make any sense, why can't people be helpful on here and just explain how it works..?

Answer 30

@may2222 We did explain how it works. Break it up, run each of the different rates in the formula provided, sum the totals.

If you do not understand that, find your own problem, or re-post theirs, and explain what part of that you don't understand.

Different people have different levels of knowledge. For one, just providing the formula is enough. They have simply forgotten which formula is used and once reminded of that they are able to run with it. Other need more help. If we assume that everybody knows nothing and do detailed explanations every time, it is a waste of our efforts. Not everybody needs that. It is also insulting to anyone that only needs a little help because we are acting like nobody but a select few knows anything. On the other hand, if we just put out the core concept, we can then respond to direct questions about that concept. This wastes less of our time and assumes nothing about the person we are helping.

If you want to see how detailed we are willing to get, even though we started with just something small, take a look at this:
http://openstudy.com/study#/updates/518185e2e4b0aaab28b7db5c

And here is a short one where all that was needed was the properly formatted formula... once we got the right question:

http://openstudy.com/study#/updates/51a156f9e4b04449b2223add

Now, if by help, you mean why do a lot of tutors here NOT give answers? That is simple. An answer is not helping you learn. An answer helps you avoid learning. More questions, hints, pointers, and so on is helping people learn, which is the goal of the site. Answers to questions are not that.