Order ID:89JHGSJE83839 | Style:APA/MLA/Harvard/Chicago | Pages:5-10 |
Instructions:
Investigating Savings Banks to Find Their Interest Rates
Question Description
Your sister has just won $300,000 (taxfree) in the state lottery. She’s decided to quit her job and devote herself to writing novels for the next ten years, using her lottery winnings to support herself. She figures that she will need $30,000 of income at the start of the coming year, $31,000 at the start of next year, $32,000 for the third year, and so on. In order to meet these expenses, she plans to invest her lottery winnings all at once, in bonds.
If she finds that she has extra cash in any year (including the first), she plans to place it in her savings account, which pays 3 percent annual interest, but she does not want to purchase any additional bonds in the future. At the start of the coming year, bonds with one-, three-, five-, and 10-year maturities will become available on the market.
If a bond matures in k years, it pays $100 at the end of each of k years, as well as $1,000 at the end of the kth year. Currently, one-year bonds sell for $1,075, three-year bonds for $1,100, five-year bonds for $1,200, and ten-year bonds for $1,300. Your sister wants to make sure that the income from her investments will provide for her living expenses year by year.
She has asked you to advise her on how many bonds to purchase and has offered to give you any funds left over at the end of the ten-year period.
Assume that you wish to maximize the amount of money available to you at the end of ten years. How many of each type of bond should your sister purchase? (Assume that these bonds can be purchased in fractional amounts, as part of an investment pool.)
How much money will be available to you at the end of ten years?
Suppose you investigate other savings banks and find that interest rates higher than 3 percent are available. What is the minimum interest rate that would alter which of the four types of bonds your sister should buy?
RUBRIC |
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Excellent Quality 95-100%
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Introduction
45-41 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Literature Support 91-84 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Methodology 58-53 points Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met. |
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Average Score 50-85% |
40-38 points More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided. |
83-76 points Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration. |
52-49 points Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met. |
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Poor Quality 0-45% |
37-1 points The background and/or significance are missing. No search history information is provided. |
75-1 points Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration. |
48-1 points There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met |
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Investigating Savings Banks to Find Their Interest Rates |
Investigating Savings Banks to Find Their Interest Rates