Module 3 SLP

Module 3 SLP - why by the end of the module. Ok, so I am...

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Trident University Rafael E. Martinez MAT101 - College Mathematics Module 3 SLP Dr. Gregory Dlabach Take the current amount you have in your checking or savings account. Suppose you have a choice of  keeping your money for five years in a savings account with a 2% interest rate, or in a five year certificate  of deposit with and interest rate of 4.5%. Calculate how much interest you would earn with each option  over five years time with  continuous   compounding.  Submit a one to two page paper describing which savings instrument you would prefer and 
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Unformatted text preview: why by the end of the module. Ok, so I am going to assume that I have $3,000 in a savings account. The formula for continuous compounding is given as A = Pe rt Where A is equal to the total amount P will be the Principal (R) is the rate and (t) the time With this being said then we have that: A = 3000x e 0.02x5= $ 3315.51 Then with the Certificate of deposit we have. A= 3000x e 0.045x5 =3756.97 As long as the money does not need to be withdrawn early, the Certificate of Deposit is a better Investment. It provides an extra $441.46 in the five year period....
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This note was uploaded on 04/02/2012 for the course MAT 101 taught by Professor Unknown during the Spring '12 term at CUNY Hostos.

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Module 3 SLP - why by the end of the module. Ok, so I am...

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