Suppose someone wants to accumulate $40,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person to reach the goal. Assume the compounding and payment periods are the same. The person deposits $200 per month into an account with an APR of 8%.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Suppose someone wants to accumulate $40,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person to
reach the goal. Assume the compounding and payment periods are the same.
The person deposits $200 per month into an account with an APR of 8%.
Will the person meet the goal? Select the correct choice below and fill in the answer box to complete your choice.
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
OA. Yes, because the amount that will be in the college fund, S
OB. No, because the amount that will be in the college fund, S
is more than the goal of $40,000.
is less than the goal of $40,000.
Transcribed Image Text:Suppose someone wants to accumulate $40,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person to reach the goal. Assume the compounding and payment periods are the same. The person deposits $200 per month into an account with an APR of 8%. Will the person meet the goal? Select the correct choice below and fill in the answer box to complete your choice. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) OA. Yes, because the amount that will be in the college fund, S OB. No, because the amount that will be in the college fund, S is more than the goal of $40,000. is less than the goal of $40,000.
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