Miles' uncle Aaron Davis (Jefferson's brother) is out on the prowl one night and sees an ad for another bank offering a special college savings account, which he tells Jefferson and Rio about. If you commit to deposits of $80 a month for 18 years, then they are offering a guaranteed rate of 4.5% interest compounded monthly. How much would they have at the end of 18 years with this account? Is this a better option? Why or why not?
Miles' uncle Aaron Davis (Jefferson's brother) is out on the prowl one night and sees an ad for another bank offering a special college savings account, which he tells Jefferson and Rio about. If you commit to deposits of $80 a month for 18 years, then they are offering a guaranteed rate of 4.5% interest compounded monthly. How much would they have at the end of 18 years with this account? Is this a better option? Why or why not?
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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![2. Miles' uncle Aaron Davis (Jefferson's brother) is out on the prowl one night and sees an ad for another
bank offering a special college savings account, which he tells Jefferson and Rio about. If you commit
to deposits of $80 a month for 18 years, then they are offering a guaranteed rate of 4.5% interest
compounded monthly. How much would they have at the end of 18 years with this account? Is this a
better option? Why or why not?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffdb6b7a1-1e81-4787-bf86-1e1e8b582305%2F4d034dbb-ba0a-4d2f-a430-9be4c8d201c3%2Fgm0lmnh_processed.png&w=3840&q=75)
Transcribed Image Text:2. Miles' uncle Aaron Davis (Jefferson's brother) is out on the prowl one night and sees an ad for another
bank offering a special college savings account, which he tells Jefferson and Rio about. If you commit
to deposits of $80 a month for 18 years, then they are offering a guaranteed rate of 4.5% interest
compounded monthly. How much would they have at the end of 18 years with this account? Is this a
better option? Why or why not?
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