6.6 Methods of Savings
Where cash can sit and still grow: insured savings accounts, certificates of deposit, money market accounts, and steady scheduled deposits.
7 exercises
6.6 Exercise 1
Violet deposits $4,520.00 in a savings account bearing 1.45% interest compounded annually. If she does not add to or withdraw any of that money, how much will be in the account after 3 years?
6.6 Exercise 3
Silvio deposits $10,000 in a CD that yields 2.17% compounded semiannually for 5 years. How much is the CD worth after 5 years?
6.6 Exercise 5
Marietta opens a money market account, and deposits $2,500.00 in the account. It bears 1.76% interest compounded monthly. If she makes no other transactions on the account, how much will be in the account after 4 years?
6.6 Exercise 7
- Determine the return on investment for the 5-year CD from the example. Round the percentage to two decimal places.
- Determine the return on investment for the money market account from the example. Round the percentage to two decimal places.
6.6 Exercise 9
Jill has an account that bears 3.75% interest compounded monthly. She decides to deposit $250.00 each month, at the end of the compounding period, into this account. What is the future value of this account, after 8 years?
6.6 Exercise 11
When Yusef was born, Rita and George began to save for Yusef’s college years by investing $2,500 each year in a savings account bearing 3.4% interest compounded annually. How much will they have saved after 18 years?
6.6 Exercise 13
Yaroslava wants to save in order to buy a car, in 3 years, without taking out a loan. She determines that she’ll need $35,500 for the purchase. If she deposits money into an ordinary annuity that yields 4.25% interest compounded monthly, how much will she need to deposit each month?
Adapted from Contemporary Mathematics © 2023 Rice University. Licensed under CC BY 4.0. Source: Contemporary Mathematics. Imported at revision fa7c1a1.