Question
You decide to invest a $15,000 bonus in a money market fund that guarantees a 5.5% annual interest rate compounded monthly for5 years. A one-time
You decide to invest a $15,000 bonus in a money market fund that guarantees a 5.5% annual interest rate compounded monthly for5 years. A one-time fee of $25 is charged to set up the account. In addition, there is an annual administrative charge of 1.25% of the balance in the account at the end of each year. (i) How much is in the account at the end of the first year? (ii) How much is in the account at the end of thefifth year?
Tracy needs to borrow $1000 for an automobile repair. She finds that State National Bank charges 5% simple interest on the amount borrowed for the duration of the loan and requires the loan to be repaid in six equal monthly payments. Consumer's Credit Union offers loans of $1000 to be repaid in 12 monthly payments of $86.30. How much interest is charged for each option?Which option should Tacy choose?
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