02 Saving Case Study
02 Saving
Part 1) * I am saving my money that I have been earing so that I can put it toward my college tuition. College tuition is very expensive so I need to start and save my money now. * I want to make this purchase because I plan on going to college after I graduate from high school. I plan on attending University of Miami. What I really want to be when I’m older is a lawyer and Miami has one of the best law programs in Florida. Since Miami is a private college, their tuition is higher. So to help my family and I out, I plan on saving my money up so that it will go towards my college tuition. * The purchase price that I am looking at for my tuition is $10,000. Since I am a student it will be hard for me to get more than that at this time. …show more content…
* The interest rate of this type of account is 0.01% * The compounding frequency is monthly. * https://www.bankofamerica.com/deposits/savings/regular-savings-account.go
Part 3) 1. A=P(1+r/n)^nt
A=7500(1+.01/12)^12*10
A=7500(1+0.00083)^120
A=7500(1.105124852)
A=$8288.44 2. I=Prt+P
I=7500*0.01*10+7500
I=750+7500
I=$8250
3.
Part 4) 1. The difference between the graph of a simple interest investment and the graph of a compound interest investment is that over time, a compound interest investment graph will have more value compared to a simple interest investment graph. In a compound interest investment graph, it increases at a steady ratio. 2. The difference between a simple interest investment and a compound interest investment is that in a simple interest investment, it is added to a principal that does not change while in a compound interest investment, it is added to a principal that does change. 3. It will take about 29 years for me to save enough money to make my purchase based on the compound interest
Part 1) * I am saving my money that I have been earing so that I can put it toward my college tuition. College tuition is very expensive so I need to start and save my money now. * I want to make this purchase because I plan on going to college after I graduate from high school. I plan on attending University of Miami. What I really want to be when I’m older is a lawyer and Miami has one of the best law programs in Florida. Since Miami is a private college, their tuition is higher. So to help my family and I out, I plan on saving my money up so that it will go towards my college tuition. * The purchase price that I am looking at for my tuition is $10,000. Since I am a student it will be hard for me to get more than that at this time. …show more content…
* The interest rate of this type of account is 0.01% * The compounding frequency is monthly. * https://www.bankofamerica.com/deposits/savings/regular-savings-account.go
Part 3) 1. A=P(1+r/n)^nt
A=7500(1+.01/12)^12*10
A=7500(1+0.00083)^120
A=7500(1.105124852)
A=$8288.44 2. I=Prt+P
I=7500*0.01*10+7500
I=750+7500
I=$8250
3.
Part 4) 1. The difference between the graph of a simple interest investment and the graph of a compound interest investment is that over time, a compound interest investment graph will have more value compared to a simple interest investment graph. In a compound interest investment graph, it increases at a steady ratio. 2. The difference between a simple interest investment and a compound interest investment is that in a simple interest investment, it is added to a principal that does not change while in a compound interest investment, it is added to a principal that does change. 3. It will take about 29 years for me to save enough money to make my purchase based on the compound interest