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Exercise 18

Avg difficulty 2.5

Elisa decides to cancel her cable TV and to deposit the $100 she will save each month into an account that pays 4.5% APR compounded monthly.

  1. How much will she have in the account in 10 years?

  2. What minimum initial lump sum deposit would she need to make today to have the same balance in 10 years without saving the $100 per month?

Lee et al., Math in Society, §2.3 Savings Plans, Exercise 18

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Adapted from Math in Society © 2018–2024 Portland Community College Math Instructors. Licensed under CC BY-SA 4.0. Source: Math in Society. Imported at revision 68ee43c.