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Background Not only is there power in compound interest, but students have one thing that none of their teachers have, a
Posted: Wed Jul 13, 2022 5:08 am
by answerhappygod
- Background Not Only Is There Power In Compound Interest But Students Have One Thing That None Of Their Teachers Have A 1 (50.74 KiB) Viewed 27 times
- Background Not Only Is There Power In Compound Interest But Students Have One Thing That None Of Their Teachers Have A 2 (25.31 KiB) Viewed 27 times
Background Not only is there power in compound interest, but students have one thing that none of their teachers have, and that's youthl The earlier you start to invest your money in safe investments, the better it is to got great results. Task1 The following will show you what I mean. You will be using your T.84 TVM Solver finarcial app or any online TVM solver. Let us look at the investment strategy of two friends, Qwerty and Igor. Both are into their jobs at the age of 20 . Qwerty decides to 5ave$3600 a year ( $300/month) at 9.6% compounded a year. He puts his investments in at the BEGINNING of the year, so make sure for this exercise you have highlighted BEGIN at the bottom of your app as seen on the left below Igor. decides to have fun with his money, invests none of it, but buys a hot car, goes on exotic trips, and so on. When Qwerty turns 27, he stops putting money into his investments BUT keeps what he has earned in total to continue to eam interest. Mearwhile lgor sort of wakes up and sees what his fhend Owerty has done, and decides to invest $3.360 a year, also at 9.6% compounded a year. He also puts his investments in at the BEGINNING of the year, so make sure for this exercise you have highlighted BEGIN at the bottom of your app as seen on the right below. Igor continues to put his money in EVERY year for another 36 years. So, let's compare their final result 36 years later. Qwerty has added in no money over those 36 years but lets the power of compound interest work for him. I have started filling out the TVM Solver for you below. Fill in the blarks and then answer the questions following.
The FV (Future Value) of Qwerty in column 1, becomes the PV (Present Value) of Qwerty in the second column. Now let's see the total amount invested by each person: Qwerty: 7 years (a) $3600 a year =$ Igor: 36 years (a) $3360 a year =$ Who earns the most money and what is the difference between their final totals? Work: Who invested the most money and what is the difference between their final totals? Work: What is the Rate of Return (ROR) of each person? Work: