Part 1:
You and your best friend want to backpack through Europe. You have done some research and discovered that it will cost $2,000 for the plane ticket, rail pass, food, and lodging. You have already saved $1,500. If you invest this money in a savings account with a 3% interest rate compounded annually, how long will it take to earn enough money to go on the trip? Use the compound interest formula A = P (1 + i)n, where A is the accumulated amount, P is the principal, i is the interest rate per year, and n is the number of years.
Part 2:
You are planning to go on the trip to Europe in 2 years. How much money will you need to invest at a 3% interest rate compounded annually in order to have $2000 in 2 years? Use the compound interest formula A = P (1 + i)n.
Part 3:
You only have $1500 to invest and the highest interest rate you can find is 3% compounded annually. If you decide to wait 4 years to go on the trip, how much money will you have to spend on the trip? Use the compound interest formula A = P (1 + i)n.
Thanks in advance!
You and your best friend want to backpack through Europe. You have done some research and discovered that it will cost $2,000 for the plane ticket, rail pass, food, and lodging. You have already saved $1,500. If you invest this money in a savings account with a 3% interest rate compounded annually, how long will it take to earn enough money to go on the trip? Use the compound interest formula A = P (1 + i)n, where A is the accumulated amount, P is the principal, i is the interest rate per year, and n is the number of years.
Part 2:
You are planning to go on the trip to Europe in 2 years. How much money will you need to invest at a 3% interest rate compounded annually in order to have $2000 in 2 years? Use the compound interest formula A = P (1 + i)n.
Part 3:
You only have $1500 to invest and the highest interest rate you can find is 3% compounded annually. If you decide to wait 4 years to go on the trip, how much money will you have to spend on the trip? Use the compound interest formula A = P (1 + i)n.
Thanks in advance!
-
Lexi
Part 1:
You and your best friend want to backpack through Europe. You have done some research and discovered that it will cost $2,000 for the plane ticket, rail pass, food, and lodging. You have already saved $1,500. If you invest this money in a savings account with a 3% interest rate compounded annually, how long will it take to earn enough money to go on the trip? Use the compound interest formula A = P (1 + i)n, where A is the accumulated amount, P is the principal, i is the interest rate per year, and n is the number of years.
1500(1+.03)^n = 2000
(1.03)^n = 1.3333, now use property of logs ...
nlog(1.03) = log 1.3333
n = log 1.3333 / log 1.03 = 9.7 years
Part 2:
You are planning to go on the trip to Europe in 2 years. How much money will you need to invest at a 3% interest rate compounded annually in order to have $2000 in 2 years? Use the compound interest formula A = P (1 + i)n.
P(1.03)^2 = 2000
P = 2000 / (1.03)^2 = 1885.19
Part 3:
You only have $1500 to invest and the highest interest rate you can find is 3% compounded annually. If you decide to wait 4 years to go on the trip, how much money will you have to spend on the trip? Use the compound interest formula A = P (1 + i)n.
1500(1.03)^4 = 1688.26
Hope that helps
Part 1:
You and your best friend want to backpack through Europe. You have done some research and discovered that it will cost $2,000 for the plane ticket, rail pass, food, and lodging. You have already saved $1,500. If you invest this money in a savings account with a 3% interest rate compounded annually, how long will it take to earn enough money to go on the trip? Use the compound interest formula A = P (1 + i)n, where A is the accumulated amount, P is the principal, i is the interest rate per year, and n is the number of years.
1500(1+.03)^n = 2000
(1.03)^n = 1.3333, now use property of logs ...
nlog(1.03) = log 1.3333
n = log 1.3333 / log 1.03 = 9.7 years
Part 2:
You are planning to go on the trip to Europe in 2 years. How much money will you need to invest at a 3% interest rate compounded annually in order to have $2000 in 2 years? Use the compound interest formula A = P (1 + i)n.
P(1.03)^2 = 2000
P = 2000 / (1.03)^2 = 1885.19
Part 3:
You only have $1500 to invest and the highest interest rate you can find is 3% compounded annually. If you decide to wait 4 years to go on the trip, how much money will you have to spend on the trip? Use the compound interest formula A = P (1 + i)n.
1500(1.03)^4 = 1688.26
Hope that helps