As part of saving for your daughter’s future college expenses strategy, you plan to save $2,500 quarterly in an interest-bearing account with an annual interest rate of 4.75%. If you anticipate her to start college 16 years from today, (a) how much money will you have then? (b) Suppose she receives a full scholarship, if you decide to reinvest your funds at maturity for an additional 4 years (for her younger brother’s college education expenses), under monthly compounding and an annual interest rate of 3.25%. How much money will you have at the end of the reinvestment process?

Answer rating: 100% (QA)

a To calculate the amount of money you will have in 16 years we can use the formula for ... View the full answer