5. (5 points, invest monthly in stocks): What would be the value of your stock investments in 13 years if you invest $200 in stocks at the beginning of every month starting
today?Assume stock investments have a rate of return of 12% per year. Assume you
have a monthly return of 12% divided by 12 months, which equals 1% per month.
Assume you make a total of 13 years x 12 investments/month, which equals a total of
156 monthly investments (i. e., buy $200 of stocks today; then $200 more of stocks one
month from today; $200 more of stocks two months from today; etc.) and your 156th
investment of $200 in stocks is 155 months from today. (Hint: you are investing the
same total amount of money over 13 years as in #1. But because you're investing
$2,400 at the beginning of each year in #1 and spreading out your investment at the pace
of $200 each month in #5, your money has a little less time to work on getting a return.
So your answer in #5 should be a little less than your answer in #1.)