Calculate how much money has peter accumulated

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Five years ago Peter had started his saving for his children's higher education by putting a lump sum of $25,000 into an investment instrument on the securities market. The investment has been paying a rate of returns of 12.3% per year, compounding monthly.

Required:

a. Calculate how much money has Peter accumulated from his investment now?

b. If Peter's initial investment was $30,000 and he had obtained the same investment outcome after five years, how much should have been the actual rate of return, assuming compounding annually for his investment?

c. If Peter would like to have totally $60,000 for his children's higher education and moves all the saving accumulated from current investment after five year to another instrument that pays the interest rate of 13.5% per year, compounding annually. How long will it take for Peter to reach his target of $60,000?

Reference no: EM133071770

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