You are scheduled to receive $38,000 in two yeara. when you receive it, you will invest it for 10 more years at 6.0 percent per
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Answer:
Tina would save the same amount using either option after 20 months.
With either option, Tina would save $700.
Step-by-step explanation:
This problem can be modeled by a first order equation:
Where Tina's saved money after n months is:
S(n) = S(0) + rn, where S(0) is the money put away initially and r is how much she saves every month.
The first option is to put $500 away initially and save $10 every month, so:
The second option is to put $100 away initially and save $30 every month, so:
After how many months would Tina save the same amount using either option?
It will happen at the month n in which , so:
500 + 10n = 100 + 30n
500 - 100 = 30 - 10n
400 = 20n
20n = 400
n = 20.
Tina would save the same amount using either option after 20 months.
How much would she save with either option?
We can choose or
, since they are equal
With either option, Tina would save $700.