3.

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You invest $2600in an account that pays an APR of3%. The numbers of times the investment is compounded each year makes a difference in the final balance.(a) What is the value of the investment afterfiveyears if interest is compounded yearly? Round your answer to the nearest cent.The value of the investment afterfiveyears is $ .

(b) What is the value of the investment afterfiveyears if interest is compounded monthly? Round your answer to the nearest cent.The value of the investment afterfiveyears is $ .

4.

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Assume that an investment of $6000earns an APR of 6% compounded monthly for16months. How much money is in your account after16months? (Round your answer to the nearest cent.) $ How much of the money in your account after16months is interest? (Round your answer to the nearest cent.) $

5.

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When you buy a certificate of deposit (CD), you are investing your money in an account that earns interest for a specific period of time. A CDmatureswhen it has been invested for the required amount of time. Assume that you have $3300to invest in a4-year CD with an APR of2.7% compounded daily. When the CD matures, how much interest will you have earned? Round your result to the nearest cent. $

6.

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You are comparing two banks. One bank is online and offers a savings account interest rate of1.75% compounded quarterly. One bank is in your hometown and offers a savings account interest rate of1.72% compounded daily. You have $6000to keep in a savings account for5years, so you need to decide which bank would pay more interest. The online bank has an APY of what percentage? Round your percentage to three decimal places) %. The hometown bank has an APY of what percentage? Round your percentage to three decimal places) %. Therefore if you invest the same amount of money for the same amount of time, the bank that pays more interest isOnline bankHometown bank

How much more interest would you earn at the bank you just selected compared to the other bank? State your result rounded to two decimal places. Hint: You will need to use the original investment information to calculate the interest earned on each account. $

7.

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Kellie has $10,000to invest. A local bank offers a 30-month CD with an APR of3.4% compounded monthly. What is the APY? (Round your answer to three decimal places.) % Mariah has $13,000to invest. A local bank offers a 24-month CD with an APR of3.4% compounded monthly. What is the APY? (Round your answer to three decimal places.) % Compare the APY results. Which of the following statements is true? Kellie's CD has a higher APY because her money is invested for a longer period of time than Mariah's.Mariah's CD has a higher APY because the amount of money she is investing is greater than Kellie's. Their CDs have the same APY because they have the same number of compoundings per year and the same APR. The amount invested and the time period of the investment don't matter because they aren't part of the APY formula.

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At age 25, you start work for a company and are offered two retirement options.Retirement option 1:When you retire, you will receive a lump sum of $30,000 for each year of service. Retirement option 2:When you start to work, the company deposits $15,000 into an account with an APR of 12% compounded monthly. When you retire, you get the balance of the account.

At age55, option 1 will provide a retirement benefit of what amount? $ At age55, option 2 will provide a retirement benefit of what amount? Round your answer to the nearest whole dollar. $ Which option is better if you retire at age55? retirement option 1retirement option 2

At age65, option 1 will provide a retirement benefit of what amount? $ At age65, option 2 will provide a retirement benefit of what amount? Round your answer to the nearest whole dollar. $ Which option is better if you retire at age65? retirement option 1retirement option 2

9.

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Suppose you bought a three-year CD for $10,000with an APR of3.74% compounded quarterly. Determine the amount of interest you will have earned when the CD matures? Round your answer to the nearest cent. $

10.

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You want to save $10,000for a down payment on a home by making regular monthly deposits over four years. Take the APR to be5.1%.How much money do you need to deposit each month? (Round your answer to the nearest cent.) $ per month

11.

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The parents of a 3-year old child decide they need to start saving for their child's college fund. They want to have $22,000in the fund in 15 years. The fund has an APR of3.9%. What monthly deposit is required? Round your answer to the nearest cent. $ per month

12.

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Suppose you want to save in order to purchase a new car. Take the APR to be3.6%. If you deposit $350each month, how much will you have toward the purchase of a car after two years? (Round your answer to the nearest cent.) $

13.

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Assume that you have $5000to invest for 5 years. You could purchase a 5-year CD with a guaranteed interest rate of2.47% compounded monthly. On the other hand, if you are willing to face the risk of actually losing your money, you could invest it in the stock market which has an historical return rate of about 6.5% per year. Think of this as investing your money in anon-guaranteed account that pays 6.5% APR compoundedannually. With the specific interest rates quoted, how much more interest could you potentially earn by putting your money in the stock market for 5 years instead of in the CD? Round your answer to the nearest whole dollar. $

14.

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Assume you put $300per month into a retirement account for14years, and the account has an APR of3.02% compounded monthly. What is the account balance at the end of the14years? Round your answer to the nearest cent. $ How much of the money in the account at the end of the14years is your personal investment, meaning that the money came directly from you? $ How much of the money in the account at the end of the14years is interest? $ What percentage of the account balance after14years is interest? Hint: The percentage of interest in the account is equal to theamountof the account balance that is interest divided by thebaseaccount balance. Multiply that result by 100 to get a percentage. Round your percentage to one decimal place. %

15.

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Suppose that you earn $54,000per year. What is your monthly salary? $ Assume that you deposit 10% of your monthly salary into an investment account with an APR of4.8% every month for 30 years.We will assume for simplicity that your salary never changes, so you are depositing the same amount every month for 30 years. What will the balance of your investment account be after 30 years? Round your answer to the nearest cent. The balance of the account is $ How much of the investment account balance is interest? The amount of interest in the account is $

16.

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We are considering the effects of starting early or late to save for retirement. Assume that each account considered has an APR of 6% compounded monthly. Following expert advice, you begin your retirement program as soon as you graduate from college at age29. You plan to retire at the age of 65. What monthly contributions do you need to make to have a retirement account worth $1,000,000? (Round your answer to the nearest cent.) $ What will your total personal contribution be by the time you retire if you start saving after graduation? $ Against expert advice, you begin your retirement program at age46. You plan to retire at the age of 65. What monthly contributions do you need to make to have a retirement account worth $1,000,000? (Round your answer to the nearest cent.) $ What will your total personal contribution be by the time you retire if you start saving at age46? $ How much more will you personally contribute by the time you retire if you start saving at age46instead of starting right after graduation? $