INVESTMENT ASSIGNMENT

Investment Assignment



Investment Assignment

The grandmother wants to invest $ 50000 for her grandchild who is born. The child will attend college at age of 18; therefore the money will be required after 18 years to pay the college fees.

The Principal Amount (P) = $ 50000

The annual interest rate for this investment (r) = 3 % or 0.03

The time for the investment is 18 years, as explained above. Thus, (t) = 18

The annual compounding period (n) = 1

Exponential function of Grandma's investment, with time as the independent variable becomes

F (t) = P (1 + r/n) ntF (t) = 50000 ...