Question

2. Twins Taylor and Tanner both received $1,000 from their grandmother for their birthday. She told them they had to save it for 5 years. Taylor found an account paying 4.5% with monthly compounding. Tanner elected an account paying 5% with annual compounding. Who will have more at the end of the five years? EXCEL template used: Inputs:

Piper has $300,000 for her retirement.  She is considering investing in a 20-year, 7% annuity and is trying to determine whether she should take the payments quarterly or monthly.  Under which method would she get the most money each year?

EXCEL function:

Input:

Answer 1