Posted by tracy on Monday, October 24, 2011 at 9:03pm.
Suppose that you were saving money over 5 years to use in a purchase later. You have $1000 to put in the savings. After surveying several banks for savings plans, you found these options. "A" stands for the amount you will have in the bank after x years.
*
Option A: Your money would receive simple interest at the end of 5 years.
The formula is A = 1000 + 1000(0.05) x.
*
Option B: Your money will be compounded continuously.
The formula is A = (1000)(2.71828)(0.05 x).
*
Option C: You will invest in a CD (Certificate of Deposit) compounded yearly.
The formula is A = (1000)(1.05) x.
*
Option D: Buy a US Savings Bond. Buy at $1000 now.
When cashed in 5 years later, the amount will be $1267.
Calculate each of these. You can find this by substituting x = 5 in each formula. Note that there is no formula in the US Savings Bonds option, just the amount.
Post a response with your answers to the following questions.
1. What is the order of Options A, B, C, and D, listing the option which gives the greatest amount at the end of 5 years to the least?
2. Which option gave you the greatest amount at the end of the five years?
3. What was the amount you calculated with this option?
Answer this Question
Related Questions
math - You have deposited 1000$ in your saving account with an anual interst ...
algebra - Suppose you have $55 in your account. You start saving $10 each week...
mathh - rodney opens a saving account and deposits 3000 dollars. the saving ...
algebra - Delila has $1200 in a saving account and in a checking account. The ...
math - suppose walmart stock is selling at $59 a share and mattel stock is ...
math - suppose walmart stok is selling at 59 dollars a share and mattel stock is...
Finances - Kim and Dan Bergholt are both government workers considering ...
Calc - A person deposits money into a retirement account, which pays 7% interest...
math - Pat deposits $600.00 in a saving accounts at a simple interest rate of 6...
eng - i need to know if i underlined the correct topic sentence. if not can you ...
For Further Reading
