A money market fund that historically has returned 2.5% per year
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A money market fund that historically has returned 2.5% per year

You start a new job.  They give you a variety of investments for your 401K plan.  You have 4 choices

A money market fund that historically has returned 2.5% per year

A long term bond fund with an average annual return of 6%

A conservative common stock fund that has earned 8% per year.

An aggressive common stock fund that has earned 14% per year.

If you want to contribute $5000 per year for the next 20 years, how much will you have with each of the options?

Hint
Accounts & Finance"1. The Money market Fund would be calculated by the future value, which is given by = FV(rate,nper,pmt)  or the formulaFuture Value = PV(1+i)n where rate = 0.025, nper =20 and pmt =5000. Therefore, the value in money market fund with 2.5% would be= 8239.32$"...
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