MTH 1120 Week 6 Assignment Help | Baker College

Finance Application Activity

Instructions: Show all work for each section. Any paragraphs should be typed and written in complete sentences.  Use Times New Roman, 12-point font and double space.  Cite any resource that you use.Attach any additional paperwork to the back of your project.

Part 1:  Planning Ahead with Compound Interest

Scenario:  Suppose you have a new baby.  You estimate that you need $ 100,000 for their college education when they are ready to go to college in 18 years. 

1.  Assume you invest $10,000 in a mutual fund (e.g. money market fund) atan APR of 7% compounded quarterly.  How long, to the nearest tenth of a year, will it take the $10,000 to grow to $100,000?[Solve using both methods below.]

2.  At the end of 18 years, will your investment have grown to the $100,000 needed for your child’s college fund?  Explain you’re your answer means, in terms of the stated goal, using the answer in #1 above.

3.  Explain (show your work), how you might use one of the two methods above, to determine exactly how much money needs to be invested at 7%, compounded monthly, so your child has a college fund of $125,000 in 18 years.

Part 2: Career & Investments

Go to the Salary Expert websitefor career information.

·        Under Salary Info you will see: List of Average Job Salaries & Salary Comparisons by selected Careers; OR

·        Type in the Search bar to locate a career choice you are interested in, using the program of study you are pursuing

·        (PRINT the screen (or use the “snipping tool”) of the Career Choice you have chosen& attach it to your project.)

1.      Find the annual median salary from the website.

·     Median annual salary:  _________________________

2.In a one-pagetyped summary include the follow: (attach the summary to the back of your project)

·     Is the amount of money needed, calculated in #3, something your future position can support, based on your expected median salary in your future position? Explain.

·     Identify other factors and explain how they may prevent you from investing, the money you would like to be able to invest, in your child’s college fund.

·     If you cannot accumulate the $100,000 you have estimated that will be needed to fund their education, what alternative strategy/plan is there to make up the shortfall of funds?

Rubric

●       In addition to the assigned points, your writing must follow proper rules of grammar and mechanics of writing. It must also comply with APA requirements especially referencing and citation.

●       You must show your work and explanation in detail to receive full credit. Just an answer without any explanation is worth 0 points. To err on the side of caution here, if unsure, please touch base with your instructor.