The price of an ice cream is 3.95 plus 0.85 for each topping t on the ice cream

Assignment: Compound Interest Investigation

sukhopar [10]

To help Tyler better understand how his money will increase in an account that uses simple interest and one that uses compound interest, we are going to use two formulas: a simple interest formula for the accounts that use simple interest, and a compound interest formula for the accounts that use compound interest.
- Simple interest formula: $A=P(1+rt)$
where:
$A$ is the final investment value
$P$ is the initial investment
$r$ is the interest rate in decimal form
$t$ is number of years
- Compound interest formula: $A=P(1+ \frac{r}{n} )^{nt}$
where:
$A$ is the final investment value
$P$ is the initial investment
$r$ is the interest rate in decimal form
$t$ is he number of years
$n$ is the number of times the interest is compounded per year

1.
a. This is a compound interest account, so we are going to use our compound interest formula. We now that $P=1500$ , $t=5$ , and since the interest is compounded annually (1 time a year), $n=1$ . To find the interest rate in decimal form, we are going to divide it by 100%: $r= \frac{4}{100} =0.04$ . Now that we have all the values lets replace them in our compound interest formula:
$A=1500(1+ \frac{0.04}{1}) ^{(1)(5)}$
$A=1824.98$
We can conclude that after 5 years he will have $1824.98 in this account.
b. Here we will use our simple interest formula. We know that $P=1500$ , $t=5$ , and $r= \frac{4}{100} =0.04$ . Lets replace those values in our simple interest formula:
$A=1500(1+(0.04)(5))$
$A=1800$
We can conclude that after 5 years he will have $1800 in this account.
c. The compound interest account from point a will yield more money than the simple account one from point b. The difference between the tow amounts is $1824.98-1800=24.98$

2.
a. Here we are going to use our compound interest formula. We know that $P=2000$ , $t=1$ and $r= \frac{8}{100} =0.08$ . We also know that the interest is compounded Quaternary (4 times per year), so $n=4$ . Now that we have all our values lets replace them into our formula:
$A=2000(1+ \frac{0.08}{4} )^{(4)(1)}$
$A=2164.86$
We can conclude that after 1 year he will have $2164.86 in this account.
b. Here we are going to use our simple interest formula. We know that $P=2000$ , $t=1$ , and $r= \frac{8}{100} =0.08$ . Once again, lets replace those values in our formula:
$A=2000(1+(0.08)(1))$
$A=2160$
We can conclude that after 1 year he will have $2160 in this account.
c. The compound interest account from point a will yield more money than the simple account one from point b. The difference between the tow amounts is $2164.86-2160=4.86$

3.
a. Since Bank A offers an account with a simple interest, we are going to use our simple interest formula. From the question we know that $P=3200$ , $t=3$ , and $r= \frac{3.5}{100} =0.035$ . Now we can replace those values into our formula to get:
$A=3200(1+(0.035)(3))$
$A=3536$
Now, to find the interest earned for Bank A we are going to subtract $P$ from $A$
$InterestEarned=3536-3200=336$
We can conclude that the interest earned for Bank A is $336
b. Since Bank B offers an account with a compound interest, we are going to use our compound interest formula. We know that $P=3200$ , $t=3$ , $r= \frac{3.4}{100} =0.034$ , and since the interest is compounded annually (1 time a year), $n=1$ . Now that we have all the values, lets replace them in our formula to get:
$A=3200(1+ \frac{0.034}{1} )^{(1)(3)}$
$A=3537.62$
Now, to find the interest earned for Bank A we are going to subtract $P$ from $A$ :
$InterestEarned=3537.62-3200=337.62$
We can conclude that the interest earned for Bank B is $337.62
c. Even tough the interest returns between the tow Banks are very similar, Bank B offers a slightly better interest over a period of time, which can make a big difference in the long run. If Tyler wants the earn more money, he definitively should deposit his money in Bank B.
d. The compound interest account from Bank B will yield more money than the simple account one from Bank A The difference between the tow amounts is $3537.62-3536=1.62$

6 0

3 years ago

In the United States, 75 percent of adults wear glasses or contact lenses. A random sample of 10 adults in the United States wil

V125BC [204]

Answer:

0.4745 is the probability that fewer than 8 of the selected adults wear glasses or contact lenses.

Step-by-step explanation:

We are given the following information:

We treat adult adults wear glasses or contact lenses as a success.

P(Adults wear glasses or contact lenses) = 75% = 0.75

Then the number of adults follows a binomial distribution, where

$P(X=x) = \binom{n}{x}.p^x.(1-p)^{n-x}$

where n is the total number of observations, x is the number of success, p is the probability of success.

Now, we are given n = 10

We have to evaluate:

P(fewer than 8 of the selected adults wear glasses or contact lenses)

$P(x < 8)\\=1 - P(x = 8) - P(x = 9) - P(x = 10)\\=1 - \binom{10}{8}(0.75)^8(1-0.75)^2 - \binom{10}{9}(0.75)^9(1-0.75)^1- \binom{10}{10}(0.75)^10(1-0.75)^0\\=1 - 0.2815-0.1877-0.0563\\= 0.4745$