Module 8 Application Activity: Finance Project In this activity, we explore a common application of exponential and logarithmic functions. (Also, see rubric below.) Part A: Planning Ahead with Compound Interest Scenario: Suppose you have a new baby. You estimate that you need $100,000 for their college education when they are ready to go to college in 18 years. 1. Assume you invest $10,000 in a mutual fund at an APR of 7%. How long, to the nearest tenth of a year, will it take the $10,000 to grow to $100,000? [Solve using both methods below.] Solve using Logarithmic Equations Solve using the TI-84 TVM Solver N = _______________ I % = ______________ PV = ______________ PMT = _____________ FV = ______________ P/Y = _____________ Number of Years (nearest tenth): _________________ C/Y = _____________ PMT (set at End) Number of Years (nearest tenth): _________________ 2. At the end of 18 years, will your investment have grown to the $100,000 needed for your child's college fund? Explain using the answer in #1 above. 3. Explain (show your work), how you might use one of the two methods above, to determine exactly how much money needs to be invested so your child has a college fund of $100,000 in 18 years. Part 2: Career & Investments Go to http://www.careeroverview.com/salary-benefits.html (for career information) Under Salary Info you will see: List of Average Job Salaries & Salary Comparisons by Career Under Salaries by Occupation click on the career choice you could obtain with the degree you are pursuing. (PRINT the screen of the Career Choice you have chosen & attach it to your project.) 4. Find the annual median salary from the website. Median annual salary: _________________________ 5. In a one-page typed summary include the follow: (attach the summary to the back of your project) Is the amount of money needed, calculated in #3, something your future position can support, based on your expected median salary in your future position? Explain. Identify other factors and explain how they may prevent you from investing, the money you would like to be able to invest, in your child's college fund. If you cannot accumulate, the $100,000 you have estimated that will be needed to fund your child's education, what alternative strategy/plan is there to make up the shortfall of funds