Assuming annual compounding

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Reference no: EM131981601

You inherit $5,000 today. You want to put it away and use it as a down payment on a new car in 2 years. You put it in a mutual fund investment with an online discount broker, earning 6% per year.

a) What will you have at the end of 2 years, assuming annual compounding? SHOW ALL WORK FOR FULL CREDIT using the TI BAII Plus Calculator.

b) What is the total interest in $ earned on this investment over the 2 years? Show work.

c) If the investment account compounds interest monthly, what will you have at the end of 2 years? SHOW ALL WORK FOR FULL CREDIT using the TI BAII Plus Calculator.

Reference no: EM131981601

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