Investment options to maximize your future wealth at the end of 20 years Which o

Question

Investment options to maximize your future wealth at the end of 20 years

Which of the following investment options will maximize your future wealth at the end of 20 years? Assume any funds that remain invested will earn a nominal rate of 12% compounded monthly. (a) Deposit $5,000 now. (b) Deposit $80 at the end of each month for the first 10 years. (c) Deposit $50 at the end of each month for 20 years. (d) Deposit a lump sum in the amount of $15:000 at the end of year 10. (a) If you deposit $5,000 now your future wealth at the end of 20 years will be $.

Explanation / Answer

Which of the options will maximize your future wealth at the end of 20 years?

a) Deposit of $5,000 now.

a) It you deposit $5,000 now your future wealth at the end of 20 years will be $54,462.

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