1. You have no debt and $2,000 in your savings account. On your current budget, you figure that you can save an additional $2,000 each year. You want to put your money to work. Calculate the return on each of the investment options described below. (15 points)

a. Continue putting your money into your savings account, which earns an annual interest rate of 3%. What will the balance of your savings account be at the end of 10 years, and how much interest will you have earned?

Savings Balance:

Interest Earned:

Question

1. You have no debt and $2,000 in your savings account. On your current budget, you figure that you can save an additional $2,000 each year. You want to put your money to work. Calculate the return on each of the investment options described below. (15 points) 

a. Continue putting your money into your savings account, which earns an annual interest rate of 3%. What will the balance of your savings account be at the end of 10 years, and how much interest will you have earned? 

Savings Balance: 

Interest Earned:

anonymous · Answer

b. Put your savings and the extra $2,000 into a mutual fund that earns 8% annually. If you reinvest your profits each year (earning compound interest), how much will you have in the mutual fund at the end of 10 years, and how much interest will you have earned? 

Total in Mutual Fund: 

Interest Earned

anonymous · Answer

c. Leave half of your $2,000 in savings, and invest the other half in the stock market. Do the same each year, putting $1,000 in stocks and leaving $1,000 in savings. You earn 3% on your savings account, and 10% on your stock investments. How much will you have earned from your savings account after 10 years? How much will you have earned from your stock investments after 10 years? How much money will you have between your savings account and your stocks combined after 10 years? 

Money Earned From Savings Account: 

Money Earned From Stock Market: 

Total Money: