To complete parts (a) through (d) of the question, we need to calculate the following:
(a) The number of units Jim purchased each month
(b) The total value of Jim's investment each month, based on the number of units purchased and the unit price
(c) The total amount Jim invested over the six-month period
(d) The average unit price Jim paid over the six-month period
Let's calculate each of these parts step by step:
(a) Number of units purchased each month:
To calculate the number of units Jim purchased each month, we divide the amount he invested by the unit price for that month.
Month 1 (March 1):
Number of units purchased = $250 / $9.00 = 27.78 (rounded to 2 decimal places)
Month 2 (April 1):
Number of units purchased = $250 / $9.20 = 27.17 (rounded to 2 decimal places)
Month 3 (May 1):
Number of units purchased = $250 / $10.75 = 23.26 (rounded to 2 decimal places)
Month 4 (June 1):
Number of units purchased = $250 / $8.50 = 29.41 (rounded to 2 decimal places)
Month 5 (July 1):
Number of units purchased = $250 / $8.40 = 29.76 (rounded to 2 decimal places)
Month 6 (August 1):
Number of units purchased = $250 / $11.15 = 22.37 (rounded to 2 decimal places)
(b) Total value of Jim's investment each month:
To calculate the total value of Jim's investment each month, we multiply the number of units purchased by the unit price for that month.
Month 1 (March 1):
Total value of investment = 27.78 (units purchased) * $9.00 (unit price) = $250.02
Month 2 (April 1):
Total value of investment = 27.17 (units purchased) * $9.20 (unit price) = $250.24
Month 3 (May 1):
Total value of investment = 23.26 (units purchased) * $10.75 (unit price) = $250.01
Month 4 (June 1):
Total value of investment = 29.41 (units purchased) * $8.50 (unit price) = $249.94
Month 5 (July 1):
Total value of investment = 29.76 (units purchased) * $8.40 (unit price) = $249.98
Month 6 (August 1):
Total value of investment = 22.37 (units purchased) * $11.15 (unit price) = $249.99
(c) Total amount Jim invested over the six-month period:
To calculate the total amount Jim invested over the six-month period, we sum up the total value of his investment each month.
Total amount invested = $250.02 + $250.24 + $250.01 + $249.94 + $249.98 + $249.99 = $1500.18
(d) Average unit price Jim paid over the six-month period:
To calculate the average unit price Jim paid over the six-month period, we divide the total amount invested by the total number of units purchased.
Total number of units purchased = 27.78 + 27.17 + 23.26 + 29.41 + 29.76 + 22.37 = 159.75
Average unit price = Total amount invested / Total number of units purchased = $1500.18 / 159.75 = $9.39 (rounded to 2 decimal places)
So, the answers to parts (a) through (d) are as follows:
(a) Number of units purchased each month: 27.78, 27.17, 23.26, 29.41, 29.76, 22.37
(b) Total value of Jim's investment each month: $250.02, $250.24, $250.01, $249.94, $249.98, $249.99
(c) Total amount Jim invested over the six-month period: $1500.18
(d) Average unit price Jim paid over the six-month period: $9.39
2. Jim started a systematic investment program by buying $250.00 worth of mutual funds on the first day of every month starting on March 1.
Mutual funds are purchased in units. Jim purchased as many units as he could with his $250.00, including fractions of units. Unit prices for the first six months were $9.00, $9.20, $10.75, $8.50, $8.40, and $11.15 respectively. Complete parts (a) through (d) below.
1 answer
1 answer