Question 3
Would you be willing to pay S500 today in exchange for $10,000 in 30 years? What would be the key considerations in answering this question? Would your answer depend on if this arrangement was made with the Government of Canada or a fellow classmate at Yorkville University. Write a brief paragraph explaining your answer.
ii. You just got married and are planning to have children. You plan on sending your children to Yorkville University 18 years from now. The cost of college tuition is $300,000 and you have $65,000 to invest right now. What must your
id. Your best friend from Yorkville University has $10,000 to invest and wants to know how long it will take to double her money at 6.5%
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- please answer only last reuriement You are a young personal financial adviser. Molly, one of your clients approached you for consultation about her plan to save aside $450,000 for her child’s higher education in United States 15 years from now. Molly has a saving of $120,000 and is considering different alternative options: Investment 1: Investing that $120,000 in a saving account for 15 years. There are two banks for her choice. Bank A pays a rate of return of 8.5% annually, compounding semi-annually. Bank B pays a rate of return of 8.45 annually, compounding quarterly. Investment 2: Putting exactly an equal amount of money into ANZ Investment Fund at the end of each month for 15 years to get 330 000 she still shorts of now. The fund is offering a rate of return 7% per year, compounding monthly. Required: a) Identify which Bank should Molly choose in Investment 1 by computing the effective annual interest rate (EAR)? b) Calculate the amount of money Molly would accumulate…arrow_forwardquestion 6arrow_forwardyour parents are giving you $220 a month for 4 years while you are in college. At an interest rate of .51 percent per month, what are these payments worth to you when you first start college?arrow_forward
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