# UIC

posted by .

Bernie and Pam Britten are a young married couple beginning careers and establishing a household. They will each make about \$50,000 next year and will have accumulated about \$40,000 to invest. They now rent an apartment but are considering purchasing a condominium for \$100,000. If they do, a down payment of \$10,000 will be required.

They have discussed their situation with Lew McCarthy, an investment advisor and personal friend, and he has recommended the following investments:

The condominium - expected annual increase in market value = 2%.
Municipal bonds - expected annual yield = 3%.
High-yield corporate stocks - expected dividend yield = 5%.
Savings account in a commercial bank-expected annual yield = 1%.
High-growth common stocks - expected annual increase in market value = 6%; expected dividend yield = 0.
Calculate the after-tax yields on the foregoing investments, assuming the Brittens have a 28% marginal tax rate (based on Public Law 108-27, The Jobs and Growth Tax Relief Reconciliation Act of 2003).
How would you recommend the Brittens invest their \$40,000? Explain your answer.

• UIC -

Please note that we don't do students' homework for them. Be sure to go back into your textbook or use a good search engine. http://hanlib.sou.edu/searchtools/

Once YOU have come up with attempted answers to YOUR questions, please re-post and let us know what you think. Then someone here will be happy to comment on your thinking.

## Similar Questions

1. ### Finance

Bernie and Pam Britten are a young married couple beginning careers and establishing a household. They will each make about \$50,000 next year and will have accumulated about \$40,000 to invest. They now rent an apartment but are considering …
2. ### personal finace

Bernie and Pam Britten are a young married couple beginning careers and establishing a household. They will each make about \$50,000 next year and will have accumulated about \$40,000 to invest. They now rent an apartment but are considering …
3. ### Personal Finance

Bernie and Pam Britten are a young married couple beginning careers and establishing a household. They will each make about \$50,000 next year and will have accumulated about \$40,000 to invest. They now rent an apartment but are considering …
4. ### PERSONAL FINANCE

Bernie and Pam Britten are a young married couple beginning careers and establishing a household. They will each make about \$50,000 next year and will have accumulated about \$40,000 to invest. They now rent an apartment but are considering …

Bernie and Pam brittten are a young couple beginning careers and establishing a household. They will each make about \$50,000 next year and will have accumulated \$40,000 to invest, they now rent an apartment but are considering purchasing …
6. ### Intro to FInance

If Mr. Hobbit deposits \$2,000 at the end of each year for the next 10 yrs at the intrest rate of 12% per year, how much will have accumulated?
7. ### Personal Finance

Bernie and Pam Britten are a young married couple beginning careers and establishing a household. They will each make about \$50,000 next year and will have accumulated about \$40,000 to invest. They now rent an apartment but are considering …
8. ### Personal Finance

Bernie and Pam Britten are a young married couple beginning careers and establishing a household. They will each make about \$50,000 next year and will have accumulated about \$40,000 to invest. They now rent an apartment but are considering …
9. ### Personal Finance Concept

Bernie and Pam Britten together earn \$100,000 a year. They have \$40,000 to invest they are considering buying a condo for \$100,000 with a required \$10,000 down payment. Their friend has recommended the following investments the condo-expected …
10. ### math

Find the taxes for the following using the appropriate Tax Rate Schedule formulas. 1. Single - \$168,000 2. Single - \$247,000 3. Married, filing jointly -\$421,000 4. Head of Household - \$219,000 5. Married, filing separately - \$154,642 …

More Similar Questions