allow 2 summers of working, Samuel has decided to invest his earnings. SAMUELS BANK OFFERS TWO CDS, a preferred CD $10,000 minimum at 1% interest, or a standard CD with $7000 minimum at 2%interest earned annually. Samuel has $8000 to invest. how many years will Samuel need to invest his money in the standard CD before he will have enough to invest in a preferred Cd?

Question

allow 2 summers of working, Samuel has decided to invest his earnings. SAMUELS BANK OFFERS TWO CDS, a preferred CD $10,000 minimum at 1% interest, or a standard CD with $7000 minimum at 2%interest earned annually. Samuel has $8000 to invest. how many years will Samuel need to invest his money in the standard CD before he will have enough to invest in a preferred Cd?

Answer 1

igot 6 but not sure im working it right

Answer 2

The logic of this question escapes me.

Why would a "preferred" CD earning 1% have an advantage over a Standard CD that earns 2%

anyway, so suppose he invests his $8000 at 2%
he wants $2000 interest (to get to the 10,000 minimum ?? )
2000 = 8000(.02)t
t = 2000/(8000(.02)) = 12.5 years

Answer 3

To determine how many years Samuel will need to invest his money in the standard CD before he has enough to invest in a preferred CD, we need to compare the interest earned on both CDs.

Let's start with the standard CD:
- Samuel has $8000 to invest and the minimum investment amount for a standard CD is $7000.
- The interest rate for the standard CD is 2% per year.

To calculate the interest earned on the standard CD, we can use the formula: Interest = Principal * Rate.
In this case, the principal is $8000 and the rate is 2% (or 0.02).

Interest earned after one year on the standard CD = $8000 * 0.02 = $160.

So, after one year, Samuel will have his initial investment of $8000 plus the interest earned of $160, totaling $8160.

Now, let's calculate how many years it will take for Samuel to have enough to invest in a preferred CD, which has a minimum investment of $10,000 at 1% interest.

We can set up an equation: $8160 + ($8160 * Interest Rate) * Number of Years = $10,000.

Plugging in the values, the equation becomes: $8160 + ($8160 * 0.01) * Number of Years = $10,000.

To solve for the number of years, we can rearrange the equation: Number of Years = ($10,000 - $8160) / ($8160 * 0.01).

Calculating this equation, we find:
Number of Years = ($1840) / ($81.60) = 22.53 years.

Therefore, Samuel will need to invest his money in the standard CD for approximately 23 years before he will have enough to invest in a preferred CD.