If your grandma said you could have $5,000 when you graduate from college in four years, what is that money worth today? Calculate your answer when the real interest rate is 3%, 5%, and 10%

This question relates to Present Value.

Real Interest rate is 3%;

= Principal / (1 + rate) ^ number of years

= 5,000 / ( 1 + 3%)⁴

= $4,442.44

Real Interest rate is 5%;

=  5,000 / ( 1 + 5%)⁴

= $4,113.51

Real Interest rate is 10%;

= 5,000 / ( 1 + 10%)⁴

= $3,415.07

overview:

this is a technology-dependent lesson that students can guide at their own pace of exploration and learning. students share what they learn through the use of twitter (or alternative classroom sharing medium like todaysmeet). the use of a social sharing platform like twitter gives students a place for sharing with a wider audience, for more effective means of communication with each other, for incorporating viewpoints from all students in the classroom, and a means to reference thinking and learning by the use of a hashtag at a later time. students will understand the role the allied air forces played in the normandy invasion. teachers can use this as a stand-alone lesson or offer more structure by guiding students through each source, one by one. teachers may learn more about the eighth air force by accessing the abmc’s strategic bombing campaign interactive.

answer; lorenz;