Your daughter just gave birth to a baby girl. You are going to invest $10,000 to help pay for college, which you expect

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answerhappygod
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Your daughter just gave birth to a baby girl. You are going to invest $10,000 to help pay for college, which you expect

Post by answerhappygod »

Your daughter just gave birth to a baby girl. You are going to
invest $10,000 to help pay for college, which you expect her to
start in 18 years. Your broker offers you two investment choices:
1) a portfolio of technology stocks that is expected to earn an
interest rate of 9%; or 2) a portfolio of industrial stocks that is
expected to earn a rate of 8%. How much larger is the gift (when
she starts college) with the higher interest rate (compared to the
lower rate)?
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