math

posted by .

Jim wants to deposit money in an account to save for a new stereo system in two years. He wants to have $4,000 available at the time. The following rates are available to him:
6.2% simple interest
6.1% compounded annually
5.58% compounded semiannually
5.75% compounded quarterly

Which account(s) should he choose if he wants to invest the smallest amount of money now?

  • math -

    consider the amount of $1 at the end of 2 years

    at 6.2% simple ---- 1 + (1)(.062)(2) = $1.124
    at 6.1 comp. annually ---- (1.061)^2 = $1.1257
    at 5.58% com. semi --- (1.0279)^4 = $1.11636
    at 5.75% comp. quarterly -- (1.014375)^8 = 1.12096

    so what do you think?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Math

    Please check my work, thank you If $7,800 is deposited into an account paying 6% interest compounded annually (at the end of each year), how much money is in the account after 2 years?
  2. math

    Jim wants to deposit money in an account to save for a new stereo system in two years. He wants to have $4,000 available at the time. The following rates are available to him: 6.2% simple interest 6.1% compounded annually 5.58% compounded …
  3. calc2

    At what constant, continuous annual rate should you deposit money into an account if you want to have $1,000,000 in 25 years?
  4. Interest

    In 6 years, Jim wants to have $47,230 to buy a new car. (a) How much must Jim save each month if the interest rate is 6% compounded monthly?
  5. Math

    Serena wants to borrow $15 000 and pay it back in 10 years. Interest rates are high, so the bank makes her two offers: • Option 1: Borrow the money at 10%/a compounded quarterly for the full term. • Option 2: Borrow the money at …
  6. Math

    (a) Themba wants to deposit a sum of money into a savings account so that he will have R30 000 in 3 years time for an overseas holiday how much money must he deposit into the account if the interest paid on the savings is 8,5% p.a …
  7. Math/Algebra

    Jeremy opened two saving accounts at the beginning of 2010, each with an initial deposit of $4,000. Account A earned simple interest, and account B earned interest that was compounded annually. By the end of 2012, which account earned …
  8. magh

    suppose you put money into teo different bank accounts. In account #1 you deposit $500 and you will be earning 6% interest compounded quarterly. in account #2 you deposit $600 and you will be earning 5% interest compounded annually. …
  9. Math- Interest Rates

    Yvonne put $4,000 in a savings account. At the end of 3 years, the account had earned $960 in simple interest. A. how much does she have in her account at the end of 3 years?
  10. Math

    Mark put $3290 into a bank that offered 3% interest rate compounded monthly. Mark kept the money in this account for 9 years and then moved all this money to a new account that offered 6% interest rate compounded weekly. Do not round …

More Similar Questions