Ok, So heres the question: Investments- Serena has 2,500 to invest in a CD(certificate of depoist)
a. If Serena invests the 2,500 in the CD that yields 4% interest, what will the CD be worth after 2 years?
b. Serena would like to have 3,000 altogether. If the interest rate is 5%, in how many years will she have 3,000?
c. Suppose Serena invests the 2,500 for 3 years and earns 255. What was the rate of the interest?
+130536 1. 2500(1 + .04)^2 = $2704
2. 2500(1.05)^N = 3000 divide both sides by 2500
1.05^N = 6/5 take the log of both sides
log (1.05 )^N = log(6/5) and we can write
N * log (1.05) = log(6/5) divide both sides by log (1.05)
N = log(6/5) / log(1.05) = about 3.74 years
3. 2500(1 + r)^3 = 2755 divide both sides by 2500
(1 + r)^3 = 2755/2500 take the cube root of both sides
1 + r = 1.033 subtract 1 from both sides
r = .033 = about 3.3%
+130536 1. 2500(1 + .04)^2 = $2704
2. 2500(1.05)^N = 3000 divide both sides by 2500
1.05^N = 6/5 take the log of both sides
log (1.05 )^N = log(6/5) and we can write
N * log (1.05) = log(6/5) divide both sides by log (1.05)
N = log(6/5) / log(1.05) = about 3.74 years
3. 2500(1 + r)^3 = 2755 divide both sides by 2500
(1 + r)^3 = 2755/2500 take the cube root of both sides
1 + r = 1.033 subtract 1 from both sides
r = .033 = about 3.3%
