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Unit 5 DB _

# Unit 5 DB _ - Unit 5 DB Assignment A grandmother is looking...

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Unit 5- DB Assignment April 21, 2011 “A grandmother is looking for a plan to finance her new granddaughter’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 funds will be invested. The principal P= 25,000 The annual interest rate R= 0.60% The time in years T=18 The number of compounding periods N=1 Model the future value using exponential function with TIME as an independent variable. F (t) =P (1 +r/n)^nt State the future value of Grandma’s investment. Use the internet or library resources to find the average cost of a college education today; will grandma’s investment be able to cover the cost in today’s dollars; what about in the future?

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