What rate of return per year compounded yearly

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Reference no: EM132023445

1. Your daughter is born today and you want her to be a millionaire by the time she is 35 years old. open an investment account that promises to pay 12% per year. How much money must you deposit today so your daughter will have $1,000,000 by her 35th birthday?

2. Say a bank has a scheme where you can deposit $5,000 a year starting on the day your granddaughter is born till the day she turns 21 years old (22 deposits). For doing this the bank is ready to pay your grand daughter $3,000 on her 22nd birthday, and increase the amount by $2,000 every year till she turns 60. What rate of return per year compounded yearly did the bank pay for the deposits?

Around 2%

Around 5%

Around 8%

Around 11%

please show work in excel

Reference no: EM132023445

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