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Category > Business & Finance Posted 03 Jun 2017 My Price 11.00

Victor and Maria Hernandez Try to Catch Up on Their Investments

Victor and Maria Hernandez Try to Catch Up on Their Investments

The expenses associated with sending two children through college prevented Victor and Maria Hernandez from adding substantially to their investment program. Now that their younger son, Brian, has completed school and is working full time, they would like to build up their investments quickly. Victor is 47 years old and wants to retire early, perhaps by age 60. In addition to the retirement program at his place of employment, Victor believes that their investment portfolio, currently valued at $70,000, will need to triple to $210,000 by retirement time. He and Maria realize that they will have to sacrifice a lot of current spending to save and invest for retirement.

(a) What rate of return is needed on the $70,000 portfolio to reach their goal of $210,000 (assuming no additional contributions)? Use the Appendix Table A.1.

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(b) Victor and Maria think they will need a total of $400,000 for a retirement financial nest egg. Therefore, they will need to create an additional sum of $190,000 through new investments. Assuming an annual return of 8 percent, how much do the Hernandezes need to invest each year to reach their goal of $190,000? Use Appendix Table A.3.

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(c) If they assume a 6 percent annual return, how much do the Hernandezes need to invest each year to reach their goal of $190,000? Use Appendix Table A.3.

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Status NEW Posted 03 Jun 2017 10:06 AM My Price 11.00

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