Allen Hamilton is considering two plans for building an education fund for his children. Plan A-Invest $2,000
Question:
Allen Hamilton is considering two plans for building an education fund for his children.
Plan A-Invest $2,000 each year for six years. This investment will earn 10% annual interest.
Plan B-Invest $10,000 now, earning 8% annual interest for six years.
Requirement
1. Before making any calculations, which plan would you expect to provide the larger future amount? Using the tables provided in this appendix, calculate the future value of each plan. Which plan provides the larger amount at the end of six years?
Future ValueFuture value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Some students may predict that Plan A will provide the larger future value because the ...View the full answer
Answered By
Atuga Nichasius
I am a Highly skilled Online Tutor has a Bachelor’s Degree in Engineering as well as seven years of experience tutoring students in high school, bachelors and post graduate levels. I have a solid understanding of all learning styles as well as using asynchronous online platforms for tutoring needs. I individualise tutoring for students according to content tutoring needs assessments.
My strengths include good understanding of all teaching methods and learning styles and I am able to convey material to students in an easy to understand manner. I can also assists students with homework questions and test preparation strategies and I am able to help students in math, gre, business , and statistics
I consider myself to have excellent interpersonal and assessment skills with strong teaching presentation verbal and written communication
I love tutoring. I love doing it. I find it intrinsically satisfying to see the light come on in a student's eyes.
My first math lesson that I taught was when I was 5. My neighbor, still in diapers, kept skipping 4 when counting from 1 to 10. I worked with him until he could get all 10 numbers in a row, and match them up with his fingers.
My students drastically improve under my tutelage, generally seeing a two grade level improvement (F to C, C to A, for example), and all of them get a much clearer understanding!
I am committed to helping my students get the top grades no matter the cost. I will take extra hours with you, repeat myself a thousand times if I have to and guide you to the best of my ability until you understand the concept that I'm teaching you.
2+ Reviews
10+ Question Solved
Related Book For 
Financial Accounting
ISBN: 978-0133375534
2nd Canadian edition
Authors: Jeffrey Waybright, Robert Kemp, Sherif Elbarrad
Question Posted:
