Which plan would you expect to provide larger future amount

Reference no: EM13215752

Lex Rolf is considering two plans for building an education fund for his children.

Plan A---Invest $2,000 each year to earn 10% annually for six years.
Plan B---Invest $10,000 now, to earn 8% annually for six years.

Before making any calculations, which plan would you expect to provide the larger future amount? Calculate the future value of each plan. Which plan provides the larger amount at the end of six years?

"Future Value of Annuity of $1 at 10% for 6 years (Exhibit 12A-4)" Future Value
Plan A:

"Future Value of $1 at 8% for 6 years (Exhibit 12A-2)" Future Value
Plan B:

Reference no: EM13215752

Questions Cloud

Determine what is the present value of the payment : Southern Corp. will let Pacific Northern make a single payment of $400,000 at the end of five years. This payment includes both principal and interest at 12%. What is the present value of this payment. Pacific Northern will purchase the equipment t..

How many of the carbon-carbon bonds in the compound : Do the three staggered/eclipsed conformations of butane have the same ENERGY?

Indicate the solubility of the following solutes : Indicate the solubility of the following solutes in 100 g of water

Could the advertising agency say the mean : Is there sufficient evidence to conclude that the mean number of transactions per customer is more than 10 per month? Could the advertising agency say the mean is more than 9 per month?

Which plan would you expect to provide larger future amount : Before making any calculations, which plan would you expect to provide the larger future amount Calculate the future value of each plan. Which plan provides the larger amount at the end of six years "Future Value of Annuity of $1 at 10% for 6 years..

What is the ph after 25.8 ml of naoh has been added : A 74.0-mL sample of 0.13 M HNO2 (Ka = 4.0 × 10-4) is titrated with 0.14 M NaOH. What is the pH after 25.8 mL of NaOH has been added?

Explain straight-line depreciation : The new copier will allow FA to increase revenues by $2,000 each year but expenses will also increase by $500 each year. Account receivables will increase by $500 and account payables will increase by $800 if the copier is purchased.

What is the probability that a randomly selected hrm : what is the probability that a randomly selected human resource manager received over $100,000 in 2007 and what is the probability that the sample mean annual salary falls between $70,000 and $80,000?

Sufficient evidence to indicate that the bulbs : Determine if this sample data provides sufficient evidence to indicate that the bulbs have their advertised life expectancy. Do NOT do a confidence interval.

User Account

All Pages