You Would Like to Invest Some Money Today Such That

question 68

Multiple Choice

You would like to invest some money today such that your investment will be worth $100,000 fifteen years from now. Your broker gives you two options. First, you can invest at a guaranteed annual rate of 4%. Or, you can invest in stocks and hopefully earn an average of 7% per year. How much more will you have to invest today if you opt for the fixed rate rather than the stocks?

• A) $18,145.45
• B) $18,419.02
• C) $18,623.18
• D) $18,904.21
• E) $19,281.85

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Definitions:

Probability

The measure of the likelihood that an event will occur, quantified as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Manic-depressive Illness

Also known as bipolar disorder, it is a mental health condition characterized by extreme mood swings, including emotional highs (mania or hypomania) and lows (depression).

Poisson Distribution

A distribution quantifying the chances of a specific amount of occurrences happening within a set period or spatial region.

Probability

A measure of the likelihood that a certain event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.