answer the file attached as requested

Connecting the dots

Part A: Using examples, explain following “ in terms of how these are used for financial planning”.

(30 % of this assignment)

Part B: Planning problems using Excel

Calculate PMT ( Monthly payments) if you want to pay of the above loan in 20 years
How much less interest will you pay over the life of the loan ( versus paying in 30 years)

Mary is 30 years old and has $ 20,000 in her investment account equally spread in two funds and plans to add additional $ 2000 in each fund. ( 10 % of this grade)

 Fund A :

i. Current amount : $ 10,000

ii. Historical performance , 10 year average : 6.5 %

iii. $2000 added ever year

 Fund B :

i. Current amount : $ 10,000

ii. Historical performance , 10 year average : 5 .5 %

iii. $2000 added ever year

 Calculate ( using 10 year average performance) amount in each fund, and total portfolio at end of 10 years, 20 years and 30 years



Jane is 40 years old and has $ 50,000 in her investment account equally spread . And she plans to put in $ 2000 every year in each of the two funds . (15 % of this grade)

Fund A :
1. Current amount : $ 25,000
2. Historical performance , 10 year average : 8.5 %
3. Fund beta : 1.2
4. $2000 added ever year
Fund B :
1. Current amount : $ 25,000
2. Historical performance , 10 year average : 4 .5 %
3. Fund beta : 0.5
4. $2000 added ever year

1. Using ten year average performance, calculate amount in each fund, and total portfolio at end of 10 years, 20 years and 30 years
2. Calculate portfolio beta at 10 year, 20 years and 30 years ( Hint : Portfolio beta is weighted average beta . Covered in Std deviation and Beta lectures…. recorded lecture for Beta)

In reference to above ( # 5) ( 5 % of this assignment)
1. Is the Bond being sold at discount or premium. Explain your answer.