Assuming all funds are reinvested when they mature

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Adam wants to save money for his son’s college education. His son will start college 4 years from now. He wants to invest $20,000 at the beginning of each of the next 4 years to build a fund that can help pay for the cost. Each year Adam expects to have two options available: a C.D. returning 1% after 1 year, and one returning 2.3% after 2 years. This year he also has the option of investing in an opportunity that will return 3.7% after 4 years. Assuming all funds are reinvested when they mature, Adam wants to maximize the value of the college fund at the end of four years.

Reference no: EM131703074

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