Question
Future value (with changing interest rates). Jose has $6,000 to invest for a 4-year period. He is looking at four different investment choices. What will
Future value (with changing interest rates). Jose has
$6,000
to invest for a
4-year
period. He is looking at four different investment choices. What will be the value of his investment at the end of
4
years for each of the following potential investments?a.Bank CD at
3.5%.
b.Bond fund at
8.5%.
c. Mutual stock fund at
11%.
d.New venture stock at
20%.
a.What will be the value of Jose's bank CD investment that offers an annual rate of return of
3.5%
for
4
years?
$nothing
(Round to the nearest cent.)
Future
value.
Grand Opening Bank is offering a one-time investment opportunity for its new customers. A customer opening a new checking account can buy a special savings bond for
$700
today, which the bank will compound at
5.5%
for the next ten years. The savings bond must be held for at least five years, but can then be cashed in at the end of any year starting with year five. What is the value of the bond at each cash-in date up through year ten? (Use an Excel spreadsheet to solve this problem.)
What is the value of the savings bond at the end of year five?
$nothing
(Round to the nearest cent.)
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