Grand Opening Bank is offering a​ one-time investment opportunity for its new customers. A customer opening a new checking account can buy a special savings bond for ​$600 ​today, which the bank will compound at 8.5​% for the next ten years. The savings bond must be held for at least five​ years, but can then be cashed in at the end of any year starting with year five. What is the value of the bond at each​ cash-in date up through year​ ten? ​ (Use an Excel spreadsheet to solve this​ problem.)

Question

Grand Opening Bank is offering a​ one-time investment opportunity for its new customers. A customer opening a new checking account can buy a special savings bond for

​$600

​today, which the bank will compound at

8.5​%

for the next ten years. The savings bond must be held for at least five​ years, but can then be cashed in at the end of any year starting with year five. What is the value of the bond at each​ cash-in date up through year​ ten? ​ (Use an Excel spreadsheet to solve this​ problem.)

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Future value and Present value

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