Question

Melissa Gould wants to invest today in order to assure adequate funds for her son’s college education. She estimates that her son will need $20,000 in 18 years; $25,000 in 19 years; $30,000 in 20 years; and $40,000 in 21 years. How much does Melissa have to invest in a fund today if the fund earns the following interest rate?
a. 6 % per year with annual compounding
b. 6 % per year with quarterly compounding
c. 6 % per year with monthly compounding


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  • CreatedMarch 26, 2015
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