1) Rania's grandfather started a college fund for her on the day she was born. The funds were placed in "Trust" to be invested at a rate of 5.5% until her 21" birthday. Rania just turned twenty-one and has received notification that the fund is now worth $492,517.45. How much was her grandfather's initial investment?

1) Rania's grandfather started a college fund for her on the day she was born. The funds were placed in "Trust" to be invested at a rate of 5.5% until her 21" birthday. Rania just turned twenty-one and has received notification that the fund is now worth $492,517.45. How much was her grandfather's initial investment?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

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Yumi's grandparents presented her with a gift of $21,000 when she was 8 years old to be used for her college education. Over the next 9 years, until she turned 17, Yumi's parents had invested her money in a tax-free account that had yielded interest at the rate of 3.5%/year compounded monthly. Upon turning 17, Yumi now plans to withdraw her funds in equal annual installments over the next 4 years, starting at age 18. If the college fund is expected to earn interest at the rate of 4%/year, compounded annually, what will be the size of each installment? (Assume no interest is accrued from the point she turns 17 until she makes the first withdrawal. Round your answer to the nearest cent.)
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When Joe graduated from college at age 22, his grandparents established a trust fund and endowed it with $10,000. The gift is intended to serve as a retirement fund for Joe, and he will be able to draw on it when he turns 62. If the fund earns a nine percent return over that period, what will it be worth when Joe reaches age 62? [submit your answer with a comma but no dollar signs]

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