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Grand Opening Bank is offering a​ one-time investment opportunity for its new customers. A customer opening...

Grand Opening Bank is offering a​ one-time investment opportunity for its new customers. A customer opening a new checking account can buy a special savings bond for ​$800 ​today, which the bank will compound at 5.5​% for the next ten years. The savings bond must be held for at least five​ years, but can then be cashed in at the end of any year starting with year five. What is the value of the bond at each​ cash-in date up through year​ ten?

Solutions

Expert Solution

Year 5
=800*1.055^5=1045.5680051275

Year 6
=800*1.055^6=1103.07424540951

Year 7
=800*1.055^7=1163.74332890704

Year 8
=800*1.055^8=1227.74921199692

Year 9
=800*1.055^9=1295.27541865675

Year 10
=800*1.055^10=1366.51556668287

jeff jeffy answered 2 years ago
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