posted by naz
your dream car cost $100000 in four years time to purchase. you won a lottery of $65000. can your lottery sum buy you the car should you invest in 90 day 11% treasury bill?
P = Po(1+r)^n.
r = 0.11/yr. * 0.25yr. = 0.0275/qtr.
n = 4 comp./yr. * 4yrs = 16 Compounding
P = 65000(1.0275)^16 = $100,328.11 in
90 days = approx. 1/4 of a yr.