The Benefit of a Higher APY. Isabel Lopez, from Lewiston, Idaho, is age 19, and she recently received an inheritance of $50,000 from her grandmother’s estate.

She plans to use the money for the down payment on a home in ten years when she finishes her education.

Right now the funds are in a savings account paying 1.0 percent APY. How much would Isabel have in ten years if instead she purchased a ten-year CD paying 3.0 percent? (Hint: Use Appendix A.1 or visit the Garman/

Forgue companion website.)

AppendixLO1