Question

5) Archaic Bank only offers Simple Interest Accounts at 2%. If you opened an account with $1000, how much would be in your account after 5 years? 6) You open an account at another bank paying compound interest. If you put $1000 in the account and the interest rate is 2%, how much will you have after 5 years if the money is a) Compounded annually b) Compounded quarterly 7) You found an old baseball card that increasing in value at 4% a year. If it's worth $100 now, how much will it be worth in 10 years? 8) You just bought a used car for $10000. If it is depreciating at 8% per year, how much will it be worth 5 years from now?

Answer 1

Page No. Date Page 1 = $ 1000 r = 0.02 P= Ini Hal Poincipal balance t = 5 years toast simple intrest A = p citot) 1000 ( I+0.02x5) = 1000 (1+0:1) 1000 (1:1) - 1 100 After 5 years $ 1100 amount coill be

Padez Principal amount = $1000 Intrest rate 2/ T = 5 years compounded ht conally annually Compound enterest is nT 5 1000 1+0002) = 1000 (1.0205 = 1000 C 1.1040 808032) A $1104-0808032 compounded quately b b=4 NT A = P(strin 1.000 (1 + 0.02) 20 = 1000 ( 4.1048 955772) A =$1104.8955471

Pc(03 27. P- Value of baseball card = $100 Value increasing by 4 % every yeon ase compound interest formato annually n = 2 cue LT-10 nT A =P ( a + 100( 1 + 0-04) 10 - 100 ( 1004) to 100 X 1.4 802442849 14.8.0244284918 A Principy am oant $ 101000 n =) h = 0-08 T = 5 years > ОТ compound depsiciation formula =P ( 1 5) 10000 = $6590.8152 It's worth is $6590.8152 1 -0.08 5 A A