Stock Calculations
One invests all the 80,000 into stocks. If the stocks does not decline one will have 131,690. Throughout the 3 year investment 10,000 is being added every year. The average growth percentage is 7.5%. However the average decline is 6.9%
| Stocks | (No decline 7.5%) | |||
| Year 1 | 80000x(1.075)= 8600+1000= 96000 | |||
| Year 2 | 96000x(1.07)= 103200+10000=113200 | |||
| Year 3 | 113200x(1.075)=121690=10000=131690 | |||
| Total | 131690 |
This is the stock with decline. One can notice that they are 5,000 short due to the 6.9% decline.
| Stocks | (With decline 6.9%) | |||
| Year 1 | 80000x(1.075)= 8600+1000= 96000 | |||
| Year 2 | 96,000x(1.07)= 103200+10,000=113,200 | |||
| Year 3 | 113200x(0.931)=105,389.2+10,000=115389.2 | |||
| Total | 115,389.20 |
This is a Visual representation of the two stocks being compared on a graph. It shows the money lost in the 3 year.
Justification
Investing in stocks is always risky however it has huge upside potential. If the stocks are invested in the correct companies and at the right time one could surpass there 120,000 dollar goal. Even though there is a chance to have a decline of 6.9% it would only happen if there is another economic crisis. Remember there will always be a risk in stocks however its potential tops every other investment strategy.
3 Year G.I.C Calculations
An investment of all 80,000 dollars plus the 30,000 of savings one can meet the goal with no money leftover and no risk.
| 3 Year GIC (4.2%) | |
| Year 1 | 83600 |
| Year 2 | 86861.12 |
| Year 3 | 90509.28 |
| Total | 120509.28 |
This is a visual of the stocks compared with the 3 year GIC. As one can see the GIC( Grey line) surpass the 120,000 dollar goal( Red line).
Justification
Doing the 3 year GIC is the safest option. There is no risk, however one cannot withdraw money from the account until the 3 year period is over. If one person want to have the least risk and barely make the goal they can choose the GIC. However if one is more risky and want more money on the side stocks is the way to go. Personally I would go with the stocks because I have the potential to walkout with 10,000 dollars extra. I choose stocks because it gives me extra money. With that extra money I can use it to pay mortgage or to buy appliances for the house. Even though I can walk away with only 115,000 ( below the goal) I would still risk the money for the extra 10,000.
Colaboration
Personally I would rate my ability to work with my group a 4/4 because I was able to explain my ideas and also include other ideas as well. Furthermore I found working with my group helped find the solution for this problem. Everyone in my group had assigned jobs and our group worked in unison. I did use our groups solution with the stocks because I found it had the best outcome even with the risks. I contributed to the group by giving ideas and I was the person with the calculator doing the math. The two other people were writing the ideas down or coming up with them. Overall I feel that I worked well with my group and I would do it again.
Core Competency
I can understand and share information about a topic of interest in a clear, organized way. I was able to share my ideas and strategies during this project.
I can take on roles and responsibilities in a group; I do my share. I was able to take part in the project and do my share of work and help.
I can advocate for myself. This is because I do not care what people think of me and I am not scared of being judged or mocked.
I can find it easy to be part of a group because I can fit in well with anyone. I am very social and I am not afraid to make new friends.