answer using TVM calculations and formulas Today Dante and Sharon had their first child. All of the grandparents gave them money to help out, which added up to $23,000, and they are going to put this money into an education fund for their child's future. They are nervous about the stock market so they've decided to put their money in a GIC which earns an interest rate of 3.2%, compounded monthly. How much money will they have in the account by their child's 18th birthday? How much interest will be earned?
answer using TVM calculations and formulas
Today Dante and Sharon had their first child. All of the grandparents gave them money to help out, which added up to $23,000, and they are going to put this money into an education fund for their child's future. They are nervous about the stock market so they've decided to put their money in a GIC which earns an interest rate of 3.2%, compounded monthly.
How much money will they have in the account by their child's 18th birthday?
How much interest will be earned?
Initial deposit (I) = $23,000
Monthly interest rate (r) = 0.00266666666666667 (i.e. 0.032 / 12)
Monthly period (n) = 216 (i.e. 18 years * 12)
How much money will they have in the account by their child's 18th birthday?
How much interest will be earned?
Future value is the compounded value of initial investment using appropriate interest rate.
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