Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Today you decide to start to save money for your kids when they go to the university. Now that you are able to save 5000

image text in transcribed
Today you decide to start to save money for your kids when they go to the university. Now that you are able to save 5000 /year, you decided to save those 5000 per year in a bank account that offers a 6% interest rate compounded yearly, till the day your kids start the university (that is to say, in 20 years). Please, answer the following questions: 1. if you do your deposits at the end of every year (so your first deposit will be in one year from today) in a bank account that offers a 6% interest rate compounded yearly, and you continue doing so till the day your kids go to the university (that is to say, in 20 years): a) Draw the timeline (at least the first five periods) with its corresponding numeration of periods and cashflows in their corresponding points. (10 points) b) How much money will you have at the end? (20 points) 2.) if you decide to do your deposits at the beginning of every year (so your first deposit will be done today) in a bank account that offers a 6% interest rate compounded yearly, and you continue doing so till the day your kids go to the university (that is to say. in 20 years): a) Draw the timeline (at least the first five periods) with its corresponding numeration of periods and cashflows in their corresponding points. (10 points) b) What is the difference between this case and the previous one? (10 points) c) How much money will you have at the end? (20 points) can you please send me the answer for question 2 only i put question one because they are conectted

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Markets And Institutions

Authors: Frederic S. Mishkin

2nd Edition

0321014650, 9780321014658

More Books

Students also viewed these Finance questions

Question

What are the APPROACHES TO HRM?

Answered: 1 week ago