A grandmother is looking for a plan to finance her new grandchild’s college education. She has $25,000 to invest. Search the internet and locate a long-range investment plan, CD, Savings Bond, etc, for the grandmother. The plan is to earn compound interest.

Question

A grandmother is looking for a plan to finance her new grandchild’s college education. She has $25,000 to invest. Search the internet and locate a long-range investment plan, CD, Savings Bond, etc, for the grandmother. The plan is to earn compound interest.

Calculate the future value of the investment. You must use the advertised interest rate, the number of compounding periods per year, and the time the funds will be invested. If you are not given the number of compounding periods a year, make it up.

p=25,000(1+0.0177/1)1*8
p=25000
rate=0.0177
n=1
time=8 years
i need step by step help

Answer 1

I don't see what the problem is

Just evaluate it
P = 25000(1.0177)^8
= 25000(1.150689622)
= 28767.24

Answer 2

model the future value of grandmas investment as an exponential function,with time as the independent varible:f(t)=p(1+r/n)nt

Answer 3

A grandmother is looking for a plan to finance her new grandchild’s college education. She has $50,000 to invest. Search the internet and locate a long-range investment plan, CD, Savings Bond, etc, for the grandmother. The plan is to earn compound interest

Answer 4

To calculate the future value of an investment, you need to use the formula:

FV = PV * (1 + r/n)^(n*t)

Where:
FV = Future Value
PV = Present Value (initial investment)
r = Interest rate
n = Number of compounding periods per year
t = Time (in years)

Let's go through the steps to calculate the future value of the investment for the grandmother:

Step 1: Write down the given values:
PV = $25,000
r = 0.0177 (interest rate of 1.77%)
n = 1 (assuming compounding is yearly)
t = 8 years

Step 2: Plug the values into the formula:
FV = 25000 * (1 + 0.0177/1)^(1*8)

Step 3: Simplify the calculation inside the parentheses:
FV = 25000 * (1 + 0.0177)^(8)

Step 4: Calculate the value inside the parentheses:
(1 + 0.0177) = 1.0177

Step 5: Raise the value to the power of 8 (since t = 8):
(1.0177)^8 = 1.150698049

Step 6: Multiply the present value (PV) by the result:
FV = 25000 * 1.150698049

Step 7: Calculate the final result:
FV ≈ $28,767.45

Therefore, with an initial investment of $25,000, an interest rate of 1.77% compounded yearly, and a time period of 8 years, the future value of the investment would be approximately $28,767.45.