Your best friend just received a gift of $7,000 from his favorite aunt. He wants to save the money to use as “starter” money after college. He can invest it (1) risk-free at 6%, (2) taking on moderate risk at 8%, or (3) taking on high risk at 14%.
Requirement
1. Help your friend project the investment’s worth at the end of four years under each investment strategy and explain the results to him.