Question

Calculate the future value of a $4,000 CD earning 5.2% interest for 8 years under the following scenarios (use a calculator for the algebraic formula answer, check using the =FV function). (in Excel use =FV(i,n,0,(PV),0). Make PV negative because it is a cash out-flow. (Use the EXP function for the continuous compounding problem.) Show what Algebraic Formula you use. Submit a screenshot of this sheet filled out with the algebraic calculations, and submit your excel spreadsheet with an identifiable name to the class canvas website. Algebraic Formula Answer Spreadsheet A. Compounded yearly: _____________ ___________ B. Compounded twice a year _____________ ___________ C. Compounded quarterly: _____________ ___________ D. Compounded monthly _____________ ___________ E. Compounded continuously _____________ ___________

Assume you just inherited $2,500 from a deceased relative and you choose to invest it to start saving for the down payment on a vehicle you plan to purchase 4 years from now. You are considering the following choices:   Your credit union offers a certificate paying 2% simple interest; a local bank is offering a certificate paying 1.95% compounded quarterly; and a reputable investment firm is offering a certificate paying 1.90% compounded monthly.   Ignoring for now taxes and other special considerations, carefully evaluate your opportunities. Choose an investment and defend your choice. (solve each using algebra formulas, then check with spreadsheet function and include in the spreadsheet you submit for this assignment.)

Credit Union:

Bank:

Investment firm:

Your Conclusion:

Answer 1

1.

2.

Your Conclusion: Bank is Offering higher value for the investment. Thus Deposit in Bank is recommended

Please comment if you face any difficulty and please dont forget to upvote