Question

Constance will put $500 in a savings account. Which option should she choose so that she will have the most money?

Answer 1

Is there choices???

Answer 2

@Thatonegirlpayton ....

Answer 3

oh yes sorry hold up

Answer 4

1 year at 12 percent
1 year at 9 percent
2 years at 7 percent
2 years at 5 percent

Answer 5

yeah its ok

Answer 6

ok so

Answer 7

ok

Answer 8

What do you think the answer is?

Answer 9

umm i kinda think one year and 9 perecent

Answer 10

I dont think so....

Answer 11

oh ok

Answer 12

Okay, so what we can do here is compare the choices

Basically if the percent is higher for the same year, Constance will make more money because
\ where r is rate, t is time (years) and a is the initial value. The initial value is the same in all cases ($500) so basically the time is the same between these 2 1 year at 12 percent 1 year at 9 percent Since the 12 percent is greater than 9, we can eliminate option 2. And for these two: 2 years at 7 percent 2 years at 5 percent We can eliminate option 4, (2 years at 5 percent) because the percent is less for the same year.

Answer 13

ok

Answer 14

Okay, now we have 2 years at 7 percent vs 1 year at 12 percent. Using interest formula can you determine which is the better deal? that means which case makes more money?

Answer 15

if im being honest her i have no clue

Answer 16

Okay, interest formula is
\ Where a is the initial value ($500 in both) r is the rate, (the percent) t is the time in years, Does that help?

Answer 17

kinda

Answer 18

Alright, so what is the final outcome of 1 year at 12 percent?
and for that matter what is the outcome of 2 years at 7 percent?
Can you plug these in?