Part 1 -

You have $100,000 you want to invest for the next 30 years. You are offered an investment plan that will pay you 10% per year for first the 20 years and 7% for the last 10 years.

Requirements to answer this question -

• Create a timetable for this problem.
• How much money will you have at the end of the 30 years?
• Does it matter if the investment plan pays you 10% per year for the first 20 years and 7% percent per year for the next 10 years? Why or why not?
• How does the time value of money work?
• How does interest on interest work?
• Howdoessimpleandcompoundinginterestwork?