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A bank is offering a new investment opportunity to its customers. Typically, a parent or grandparent enters into the investment for a child at the
A bank is offering a new investment opportunity to its customers. Typically, a parent or grandparent enters into the investment for a child at the child's birth. The purchaser (say, the parent) makes the following six payments to the bank: First birthday $870 Second birthday $870 Third birthday $970 Fourth birthday $850 Fifth birthday $1,070 Sixth birthday $950 After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $370,000. If the relevant interest rate is 7.5 percent, is this a good investment opportunity? In the textbox below, you must explain why this is a good investment opportunity or not. Use your calculations to support your explanation. No credit will be given for a simple Yes or No
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