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The Essence of Investment

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The essence of investment is quite indispensable from a country’s viewpoint because it is the main thing which amply assists it to be viable. Almost every country accentuates rigorously to enhance the dilemma of investment within their country (Rachev, S.T & Fabozi, 2008). The deportment of investment beneficial either for the individual or for the company/country as well. The main prospective of this paper is to make an investment plan, considering yourself as an investment consultant. We have to calculate different returns on different securities by subtracting the tax rate from them, let’s start.

As I am the investment consultant, then I will suggest Bernie and Pam to invest their $40,000 in the following manner,

Down Payment Condominium = $10,000.

Corporate Stocks = $10,000

Common Stocks = $10,000

Municipal Bonds = $5000

Bank Saving Account = $5000

First we are going to calculate the Net Profit on the Condominium.

Yield on Condominium

Condominium Price

100'000 $

Per Annum

Down Payment

10,000 $

Annual Increment

2%

 

 

Yield

2000

Net Profit Amount

2000

Now, we are doing the same with the Corporate Stocks.

Yield on Corporate Stocks

Investment

10,000 $

Per Annum

Annual Increment

5%

 

 

Yield

500

Tax Rate

28%

Tax Amount

140

Net Profit Amount

360

Now, we are about to compute the same on the Common Stocks,

Yield on Common Stocks

Investment

10,000 $

Per Annum

Annual Increment

6%

 

 

Yield

600

Tax Rate

Not Taxed

Tax Amount

0

Net Profit Amount

600

If Pam, has invested in the Municipal bonds $5000, then mention below figures will be depict.

Yield on Municipal Bonds

Investment

5000 $

Per Annum

Annual Increment

3%

 

 

Yield

150

Tax Rate

No Tax Apply

Tax Amount

0

Net Profit Amount

150

And now last, if they deposit in the bank account,

Yield on Bank Account

Investment

5000 $

Per Annum

Annual Increment

1%

 

 

Yield

50

Tax Rate

28%

Tax Amount

14

Net Profit Amount

36

Total amount they will get in the end of the fiscal year is,

Total Return

$3146

From our investment plan, this new couple can earn $2376 on their $40,000 investment in a year with a condominium because they have already given its down payment. 

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