Suppose that you were saving money over 5 years to use in a purchase later. You have $1000 to put in the savings. After surveying several banks for savings plans, you found these options. "A" stands for the amount you will have in the bank after x years.

Option A: Your money would receive simple interest at the end of 5 years.

The formula is A = 1000 + 1000(0.05) x.

Option B: Your money will be compounded continuously.

The formula is A = (1000)(2.71828)(0.05 x).

Option C: You will invest in a CD (Certificate of Deposit) compounded yearly.

Question

Suppose that you were saving money over 5 years to use in a purchase later.  You have $1000 to put in the savings.  After surveying several banks for savings plans, you found these options.  "A" stands for the amount you will have in the bank after x years.

Option A:  Your money would receive simple interest at the end of 5 years.

The formula is A = 1000 + 1000(0.05) x.

Option B:  Your money will be compounded continuously.

The formula is A = (1000)(2.71828)(0.05 x).

Option C:  You will invest in a CD (Certificate of Deposit) compounded yearly.

anonymous · Answer

The formula is A = (1000)(1.05) x.

    Option D:   Buy a US Savings Bond.  Buy at $1000 now. 

        When cashed in 5 years later, the amount will be $1267.

Calculate each of these. You can find this by substituting x = 5 in each formula.  Note that there is no formula in the US Savings Bonds option, just the amount.

Post a response with your answers to the following questions.

        What is the order of Options A, B, C, and D, listing the option which gives the greatest amount at the end of 5 years to the least?
        Which option gave you the greatest amount at the end of the five years?
        What was the amount you calculated with this option?

anonymous · Answer

Will anyone pleaseeeeeeeeeeeee help me?!?!? please please??

anonymous · Answer

Plug in 5 for x and see which one has the largest A?

anonymous · Answer

Thats it? Wow..... i really over complicate things >.<

anonymous · Answer

"Calculate each of these. You can find this by substituting x = 5 in each formula.  Note that there is no formula in the US Savings Bonds option, just the amount."

Says what to do right in the instructions ;p

anonymous · Answer

Ik lol i guess i got scared by how long it was... ;P Thanks though (:

anonymous · Answer

Never be afraid to read long things. Many of the best written works are lengthy =)

anonymous · Answer

Yea i know THTS the truth.. i am a writer at heart.... not a mathematician :P But okay (: I will =3

anonymous · Answer

Oh for option B it says this is the actual equation:

(1000)(2.71828)^(.05^x) 

Does that make a difference? (:

anonymous · Answer

No, you still plug in 5 for x.

anonymous · Answer

And you're far better at math than you think you are ;)

anonymous · Answer

(: I think you just gave my confidence in math a huge boost :D 
And yea but usually the complicated stuff i get... and the simple stuff i dont!! 
I swear I must be crazy!!! And alright thanks (: