a.
How much interest does each account earn?
The solution is shown in the table..
Given information:
A three year CD that requires a minimum balance of
A five year CD that requires a minimum balance of
Concept Used:
Use the formula:
Where,
P= start amount
r= Rate
n= Times compounded per period of t
t=time
Calculation:
As per the given problem.
A three year CD that requires a minimum balance of
Use the formula, and substitute the values,
Interest
A five year CD that requires a minimum balance of
Interest
Conclusion:
Hence, for
b.
What is the difference in the amount of interest..
Given information:
Note that from the part (a) interest
Concept Used:
Subtract the smaller interest from the larger interest amount.
Calculation:
As per the given problem
Now use the formula,
Subtract the smaller interest from the larger interest amount.
Conclusion:
Therefore difference in the amount of interest is
c.
Describe the benefits and draw back of each account.
The benefits and drawback is in the explanation.
Given information:
A three year CD that requires a minimum balance of
A five year CD that requires a minimum balance of
Concept Used:
Use the formula:
Where,
P= start amount
r= Rate
n= Times compounded per period of t
t=time
Explanation:
Note that the first CD requires a smaller deposit amount
The second CD requires a higher deposit
However the account offers a higher
Conclusion:
The benefits and drawback is above in the explanation.
Chapter 4 Solutions
Holt Mcdougal Larson Algebra 2: Student Edition 2012
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