Fin 320 final project part 3-Boateng.docx - Final Project...

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Final Project Part 3Fin 320: Final Project Part 3Michael BoatengSouthern New Hampshire University
FINAL PROJECT PART 32Fin 320: Final Project Part 3According to this case study, the overall cost to attend school will be $100,000. I have 1,000 EE Savings Bonds with $100 denominations, 4.255 coupon rate, an interest rate of 0.10 (Ingram, D., 2014) that is 5 years from its 30-year maturity rate and 1,000 shares of Apple stock with a current price at $216.30 as of 10/26/2018 (Yahoo! Finance, 2018). So, in total in EE Savings Bond in 5 years I will have $121, 250 and $97, 340 in Apple stock. Stock Calculation1,000 × $216.30 = $216,300Bond Calculation1,000 × 000= 100,0000.0425 × 100,000= 4,250Year 14,250Year 24,250Year 34,250Year 4 4,250Year 5 104,250 (100,000 + 4,250)Total Cash =- $121, 250- will be in 5 yearsThe main advantage of bonds when an investor choses it and holds it until its maturity you collect annual interest payments and recoup original investment quick capital gains when traded on the bond market, bond-holders get paid interest each year and repaid the face value” (TreasuryDirect, 2014). Another advantage with the bonds is the stability (Mwangi, G., 2016). With EE Savings Bonds they offer the advantages of being “very secure-less chance of losing money and a disadvantage of having lower returns” (Mwangi, G., 2016). That simply means by investing in bonds you have chance to see at least the principal even if you do not perceive interest as company usually pay them back to investors contrary to stocks where you can entirely

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