Calculate future value of the investment

Assignment Help Finance Basics

Reference no: EM1344266

A grandmother is looking for a plan to finance her new grandchild's college education. She has $62,000 to invest. Search the internet and locate a long-range investment plan, CD, Savings Bond, etc, for the grandmother. The plan is to earn compound interest.

Calculate the future value of the investment. You must use the advertised interest rate, the number of compounding periods per year, and the time the funds will be invested. If you are not given the number of compounding periods a year, make it up.

The principal is $62,000. This is P.
Research the annual interest rate for your investment. This is r.
State the time in years for the investment (as in when the new grandchild will be attending college). This is t.
State the number of compounding periods per year. This is n.
Model the future value of Grandma's investment as an exponential function, with time as the independent variable: F(t) = P(1 + r/n) nt
State the future value of Grandma's investment.
Use the internet or library resources to find the average cost of a college education today; will grandma's investment be able to cover the cost in today's dollars; what about in the future?
Summarize your findings in writing using proper style and grammar.
Include references formatted according to APA style.

Reference no: EM1344266

Questions Cloud

Find all operating expenses : The current grill is being depreciated straight line over its useful life of 10 years after which it will have no salvage value.

Acquisition of bank in developing nation : Explain the issues and risks involved with a financial institution acquiring a bank in an emerging market.

Calculate the abnormal rates of return : Calculate the abnormal rates of return for the following stocks during period t (ignore differential systematic risk):

Long-term financial management decisions : About 67% of the acquisitions of other companies result in losses to the acquiring firms stockholders. Since it is well documented that most acquisitions are financial failures, why do firms continue to purchase other firms?

Calculate future value of the investment : A grandmother want a plan to finance her new grandchild's college education. She has $62,000 to invest. Search the internet & locate a long-range investment CD, Savings Bond, plan, etc, for the grandmother.

Show what are the different categories of hedge funds : How does the risk of short-term funds differ from the risk of long-term funds and What are the different categories of hedge funds?

Compute the unemployment rate as the us bureau : The nation of Wrexington utilizes the same method to Compute the unemployment rate as the U.S. Bureau of Labor Statistics utilizes. From the data below, Compute Wrexington's unemployment rate.

Prepare journal entries for acquisition : Penny's Concrete acquired 25% of outstanding common stock of Cardinal Inc on January 1, 2005, by paying $1,200,000 for 50,000 shares.

Evaluate average revenues per store : The Home Depot to evaluate average revenues per store, capital spending per new store, and ending inventory per store in 2008

User Account

All Pages