If we were to invest $10,000 in an S&P 500 index fund, pay 0.2% annual fees,and add $100 a month to it for 40 years, receiving 10.4% annual returns, what, theoretically. would happen to our investment with 3.43% annual inflation? What would it be worth in terms of today's dollars? That's 10.4% - 0.2% - 3.43% = 6.77% over 40 years.
If we were to invest $10,000 in an S&P 500 index fund, pay 0.2% annual fees,and add $100 a month to it for 40 years, receiving 10.4% annual returns, what, theoretically. would happen to our investment with 3.43% annual inflation? What would it be worth in terms of today's dollars? That's 10.4% - 0.2% - 3.43% = 6.77% over 40 years.
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 20P
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If we were to invest $10,000 in an S&P 500 index fund, pay 0.2% annual fees,
and add $100 a month to it for 40 years, receiving 10.4% annual returns, what, theoretically. would happen to our investment with 3.43% annual inflation? What would it be worth in terms of today's dollars? That's 10.4% - 0.2% - 3.43% = 6.77% over 40 years.
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