Question: If it is assumed that $200,000 will be needed 10 years from now for a college fund, how much must be invested today at 6%

If it is assumed that $200,000 will be needed 10 years

If it is assumed that $200,000 will be needed 10 years from now for a college fund, how much must be invested today at 6% nominal annual rate compounded a) Interest compounded continuously and payments continuous b) Interest compounded continuously but payments quarterly c) Interest compounded continuously but payments annually d) Interest compounded quarterly and payments quarterly e) Interest compounded semi-annually and payments semi-annually f) Interest compounded quarterly and payments monthly

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

32. What is the goal of the firm? A. To maximize the upcoming years profits. B. To maximize sales revenues. C. To maximize shareholders wealth. D. To maximize the CEOs pay. E. To maximize the...

Brad will graduate next year. When he begins work- ing, he plans to deposit $6000 at the end of each year into a retirement account that pays 6% interest. How much will be in his account after 40...

UPIN18 2020 In order to receive credit for your answers, use Excel Financial Functions or Algebraic Time Value of Money Equations to answer these questions in your spreadsheet. See General Guide-...

What is the effective interest rate for the rst year for a loan of $20,000 for three years if the interest is compounded quarterly at a rate of 12%? Instructions: Week 5 Individual Assignment Total...

Hello. I'm looking for some help completing my finance project. (10% total course grade) There are quite a few questions. (40 total) I can check the answers one time before submitting. Hoping for...

Circle the right answer: 1. A coupon bond that pays interest annually has a par value of $1,000, matures in 5 years, and has a yield to maturity (market rate) of 10%. The intrinsic value of the bond...

1. You just had your 24th birthday today and have accepted a position at CDI.com. Your salary will be paid annually with the first year's salary (of $40,000 ) paid at the end of the first year of...

c. 12.7 years d. 10 years for numbers 11-24 the choices can be seen in the table just choose the correct answers. a. 8 years b. 1,000 C. 400,000 d. 27 years e. 1,387.55 4,744.32 E- Present value of...

(Future value of an annuity) Lers say you deposited $140,000 in a 529 plan (a tax advantaged college savings plan) hoping to have $400.000 avallatie 10 ysars later afien your first chd starts...

Amazon operates what is considered to be an open market wherein it provides space and opportunity on its website for independent, competing companies to sell products. Discuss the type of quality...

4. Find the area of the parallelogram determined by a and b. 1. a = (1,0), b = (0, 1); = (0, = (1,0), b 6 = (-1, 1); 2. %3 3. %3 (0,2), (1, 1); = (1, 1), 6 = (-1, 2). 4. a

Which of the following insulin / glucagon ratios would be consistent with someone who has recently ezten a large carbohydrate meal? 1 : 1 2 : 1 1 5 : 1 1 2

Question based on modified problems 3.3 from the reference text [Flynn (2009)] from page 78 of the textbook: Polymerco, a North American manufacturer of specialty polymers, has the following highly...