Ms. Early Saver has decided to invest $1,000 at the end of each year for the next 10 years, then she will just let the amount compound for 25 additional years. Her brother, Late Saver, has a different investment program: He will invest nothing for the next 10 years, but will invest $1,000 per year (at the end of each year) for the following 25 years. If we assume a 3% percent rate of return, compounded annually, which investment program will be worth more 35 years from now? If instead, the assumed interest rate is 8% percent rate which investment program will be worth more in 35 years? Are the results with different interest rates different? Using your results elaborate on the power of compounding and how it impacts savings in the long run.
Ms. Early Saver has decided to invest $1,000 at the end of each year for the next 10 years, then she will just let the amount compound for 25 additional years. Her brother, Late Saver, has a different investment program: He will invest nothing for the next 10 years, but will invest $1,000 per year (at the end of each year) for the following 25 years. If we assume a 3% percent
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