When your fourth projected bonus rolls around

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How much money will you have when you can withdraw it on your 16th birthday, if an investment was made on your behalf equal to 11x your age from your 10th to your 14th birthdays with 17% interest?

Having already spent this year’s bonus, you resolve to save. If you save your next three projected bonuses of $425, $716 and $821, respectively for each of three years, in a high yield account paying 12.5% compounded semiannually, how much will you have when your fourth projected bonus rolls around?

Bonuses are paid at year end. You have the opportunity to buy the right to be paid $600 every 6 months for the next 3 years with an interest rate of 3.6 percent compounded semiannually. At what price do neither you nor the seller make any money on this deal, assuming no transaction (other) costs?

Reference no: EM131300286

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