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.

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.

misssunshinexxoxo · Answer

A = 1000 + 1000(0.05)5. 
A = 1000 + 250 
A = 1250 

So A is a lower value than D. 

B = (1000)(2.71828)^(0.05 * 5) 
B = 1000 * (2.781828^.25) 
B = 1284.03 

So B is more than A or D. The sequence now is B, D, A. 

C = (1000)(1.05)^5. 
C = 1276.28 

So the sequence of values is B, C, D, A.

misssunshinexxoxo · Answer

Yes :)

anonymous · Answer

ok and then Does the highest amount make the most sense to you?  Explain your point of view.

@misssunshinexxoxo

misssunshinexxoxo · Answer

Of course; by plugging in the calculations we verified it is correct!

misssunshinexxoxo · Answer

My pleasure :)