Exam 21: Savings Models

Suppose you invest in an account that pays 5% interest, compounded quarterly. You would like your investment to grow to $5000 in 16 years. How much would you have to invest in order for this to happen?

In Questions make the assumption that the change in housing prices exactly matches the change in the CPI. In fact, housing is only part of the CPI, and figures into the CPI through rents rather than sale prices, so this assumption may be far from correct. -John sold a house in 2003 for twice the amount that he paid for it. When did he purchase the house? (Use Table 21.5.)

Max invested in his employer's stock program in 2011. The annual yield for his investment was 4%, and the inflation rate was 4%. What was the real growth rate of this investment?

Nebo bought a house in 1999 for $67,000 and sold it in 2014. If the 1999 CPI is 166.6 and the 2014 CPI is 236.7, how much would the house be worth in 2014 dollars?

Tara has $85 deducted from her paycheck at the end of each month and put into a savings account earning 9% interest compounded monthly. She continues these deposits for 10 years. Approximately how much is the account worth at the end of the 10 years?

Jack wants to make an investment that will have a real growth rate of 8%. If the current inflation rate is 2.1%, what annual interest rate will he need to get on his investment to accomplish his goal?

In late 2001 the inflation rate was about 2.9%. If you invested in a savings account with an annual interest rate of 9.2%, what was the real growth rate of this investment?

What is the APY for 12.3% compounded weekly?

Lola made an investment with a 7% annual yield. However, the real annual growth rate of her investment was −2%. What was the inflation rate?

If your account compounds continuously at an annual rate of 7.85%, what is the APY of your account? Use two decimal places.

In early 2002, the inflation rate was about 1.4%. If you invested in a savings account with an annual interest rate of 4.8%, what was the real growth rate of this investment?

Suppose that you have $3000 on deposit at your bank at an annual rate of 1.3%. If the bank compounds continuously, what is the balance of your account after two years? Round to nearest cents.

Suppose you invest $6000 and would like your investment to grow to $8000 in five years. What interest rate, compounded monthly, would you have to earn in order for this to happen?

What is the APY for 4% compounded continuously?

Ray wants to make an investment that will have a real growth rate of 5%. If the current inflation rate is 2.5%, what annual interest rate will he need to get on his investment to accomplish his goal?

Use the geometric series formula to find the sum of $1 - \frac { 1 } { r } + \frac { 1 } { r ^ { 2 } } - \frac { 1 } { r ^ { 3 } } + \frac { 1 } { r ^ { 4 } } .$

John bought a house in 1947 for $19,000 and sold it in 1997. If the 1947 CPI is 22.3 and the 2014 CPI is 236.7, how much would the house be worth in 2014 dollars?

Stephanie invested in her employer's stock program in 2010. The annual yield for her investment was 8.1%, and the inflation rate was 0.86%. What was the real growth rate of this investment?

Betty bought a house in 1987 for $99,000 and sold it in 2014. If the 1987 CPI is 113.6 and the 2014 CPI is 236.7, how much would the house be worth in 2014 dollars?

You have $3500 that you invest at 7% simple interest. How long will it take for your balance to reach $4235?