1. Suppose you make an investment of $10,000. This first year the investment returns 9%, the second year it returns 5%, and the third year in returns 4%. How much would this investment be worth, assuming no withdrawals are made?
2. How much would you need to deposit every month in an account paying 9% a year to accumulate by $10,000,000 by age 75 beginning at age 30?
2. The following data give the number of daily and Sunday newspapers published in each of the 13 western states during 2000:
7, 16, 92, 29, 6, 12, 11, 8, 18, 19, 6, 24, 9
a. Calculate the mean, median, mode and standard deviation range for these data.
b. Do these data contain an outlier? If so, drop the outlier and recalculate all the measures. Which of these measures changes by a larger amount when you drop the outlier?
b. Which is the better measure of center for these data, the mean or the median? Explain.
4. You deposit $10,000 in a bank paying 16% interest. How much will you have at the end of 5 years if interest is compounded (a) annually?(b)semi-annually? (c) quarterly? (d) monthly? (e) daily?
5. Suppose the settlement date of a bond you purchased is November 30, 2001; the maturity date of the bond is December 31, 2028; the bond has a coupon rate of 6.25% and interest is paid semi-annually; the face value of the bond is $1000; and actual days per month/year is used for the day-count basis (not 30/360). Suppose investors currently want an 8.3% return for this type of bond. What price should they be willing to pay?
The solution solves several statistical problems pertaining to investments.