Assume that instead of spending $30,000 on your wedding, you only spend $5,000. You use the remaining $25,000 to buy stocks/bonds and you hold them for 40 years. Calculate the Future Value on $25,000: If your portfolio's rate of return is 8% (i = 0.08), Future Value = If your portfolio's rate of return is 6% (i = 0.06), Future Value = %3D

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Compounding: the accumulation of a sum of money
when the interest earned on the sum earns
additional interest. Because of compounding, small
differences in interest rates lead to big differences
over time.
Assume that instead of spending $30,000 on your
wedding, you only spend $5,000. You use the
remaining $25,000 to buy stocks/bonds and you
hold them for 40 years.
Calculate the Future Value on $25,000:
If your portfolio's rate of return is 8% (i = 0.08),
Future Value =
If your portfolio's rate of return is 6% (i = 0.06),
Future Value =
In a 200-word paragraph, please summarize the
results of your calculations and list three things that
you learned from this exercise.
Transcribed Image Text:Compounding: the accumulation of a sum of money when the interest earned on the sum earns additional interest. Because of compounding, small differences in interest rates lead to big differences over time. Assume that instead of spending $30,000 on your wedding, you only spend $5,000. You use the remaining $25,000 to buy stocks/bonds and you hold them for 40 years. Calculate the Future Value on $25,000: If your portfolio's rate of return is 8% (i = 0.08), Future Value = If your portfolio's rate of return is 6% (i = 0.06), Future Value = In a 200-word paragraph, please summarize the results of your calculations and list three things that you learned from this exercise.
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