02 Saving Case Study
02 Saving
Part 1) * I am saving my money that I have been earing so that I can put it toward my college tuition. College tuition is very expensive so I need to start and save my money now. * I want to make this purchase because I plan on going to college after I graduate from high school. I plan on attending University of Miami. What I really want to be when I’m older is a lawyer and Miami has one of the best law programs in Florida. Since Miami is a private college, their tuition is higher. So to help my family and I out, I plan on saving my money up so that it will go towards my college tuition. * The purchase price that I am looking at for my tuition is $10,000. Since I am a student it will be hard for me to get more than that at this time. …show more content…
Part 2) * The name of the bank that I am researching is Bank of America. * The type of account that best helps me out is the regular savings account.
* The interest rate of this type of account is 0.01% * The compounding frequency is monthly. * https://www.bankofamerica.com/deposits/savings/regular-savings-account.go
Part 3) 1. A=P(1+r/n)^nt
A=7500(1+.01/12)^12*10
A=7500(1+0.00083)^120
A=7500(1.105124852)
A=$8288.44 2. I=Prt+P
I=7500*0.01*10+7500
I=750+7500
I=$8250
3.
Part 4) 1. The difference between the graph of a simple interest investment and the graph of a compound interest investment is that over time, a compound interest investment graph will have more value compared to a simple interest investment graph. In a compound interest investment graph, it increases at a steady ratio. 2. The difference between a simple interest investment and a compound interest investment is that in a simple interest investment, it is added to a principal that does not change while in a compound interest investment, it is added to a principal that does change. 3. It will take about 29 years for me to save enough money to make my purchase based on the compound interest
graph. 4. It will take about 34 years for me to save enough money to make my purchase based on the simple interest graph. 5. The investment that is more beneficial for me is the compound interest investment because it takes the less amount of time for me to reach enough money to make my purchase. 6. In my research, I did not find any accounts that offered simple interest. I do not think that banks offers simple interest because it takes way more time to reach a certain amount of money. Why would somebody want to wait five more years extra when they can have it sooner? 7. One way that I could adjust my investment to make my purchase sooner is to try and start my account with more money. They more money that I start with, the sooner I will be able to make my purchase.
Part 1) * I am saving my money that I have been earing so that I can put it toward my college tuition. College tuition is very expensive so I need to start and save my money now. * I want to make this purchase because I plan on going to college after I graduate from high school. I plan on attending University of Miami. What I really want to be when I’m older is a lawyer and Miami has one of the best law programs in Florida. Since Miami is a private college, their tuition is higher. So to help my family and I out, I plan on saving my money up so that it will go towards my college tuition. * The purchase price that I am looking at for my tuition is $10,000. Since I am a student it will be hard for me to get more than that at this time. …show more content…
Part 2) * The name of the bank that I am researching is Bank of America. * The type of account that best helps me out is the regular savings account.
* The interest rate of this type of account is 0.01% * The compounding frequency is monthly. * https://www.bankofamerica.com/deposits/savings/regular-savings-account.go
Part 3) 1. A=P(1+r/n)^nt
A=7500(1+.01/12)^12*10
A=7500(1+0.00083)^120
A=7500(1.105124852)
A=$8288.44 2. I=Prt+P
I=7500*0.01*10+7500
I=750+7500
I=$8250
3.
Part 4) 1. The difference between the graph of a simple interest investment and the graph of a compound interest investment is that over time, a compound interest investment graph will have more value compared to a simple interest investment graph. In a compound interest investment graph, it increases at a steady ratio. 2. The difference between a simple interest investment and a compound interest investment is that in a simple interest investment, it is added to a principal that does not change while in a compound interest investment, it is added to a principal that does change. 3. It will take about 29 years for me to save enough money to make my purchase based on the compound interest
graph. 4. It will take about 34 years for me to save enough money to make my purchase based on the simple interest graph. 5. The investment that is more beneficial for me is the compound interest investment because it takes the less amount of time for me to reach enough money to make my purchase. 6. In my research, I did not find any accounts that offered simple interest. I do not think that banks offers simple interest because it takes way more time to reach a certain amount of money. Why would somebody want to wait five more years extra when they can have it sooner? 7. One way that I could adjust my investment to make my purchase sooner is to try and start my account with more money. They more money that I start with, the sooner I will be able to make my purchase.