Help, will medal and fan! (:
You are debating about whether to buy a new computer for $800.00 or a refurbished computer with the same equipment for $640.00. If a savings account earns 4.5% APR interest, how much do you really save with a refurbished computer if you put the difference into the savings account for a year?

Question

Help, will medal and fan! (:
You are debating about whether to buy a new computer for $800.00 or a refurbished computer with the same equipment for $640.00. If a savings account earns 4.5% APR interest, how much do you really save with a refurbished computer if you put the difference into the savings account for a year?

zepdrix · Answer

Hmm I don't know what APR means :(
Is that the normal compound interest formula?

anonymous · Answer

Thats true! Didn't think of that lol, and let me see if I can find it (: @zepdrix

anonymous · Answer

APR means Annual Percentage Rate (: @zepdrix

zepdrix · Answer

Oh I think I'm being silly,
the word `Annual` corresponds to n=1, compounding once per year.$$\large\rm A=P\left(1+\frac{r}{n}\right)^{nt}$$Have you seen this formula before? :)

anonymous · Answer

Yes I have (:
I think I might have gotten the answer:
so if I were to buy a refurbished computer, I would save $160, which that would lead to earning the 4.5% APR interest?

anonymous · Answer

Which then turns into 7.2, meaning you add it to the $160, coming down to my answer being $167.20?

zepdrix · Answer

Since they made this problem nice and easy,
time = one year,
I guess we didn't need that fancy formula ^^

Yes, 4.5% of the saved money is $7.20
So the total saving is $167.20

Yay good job \c:/