Exam 21: Savings Models

Suppose that you want to save up $3500 for a semester abroad two years from now. How much do you have to put away each month in a fund that earns 5% interest compounded monthly? Round to nearest cents.

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

The Martin family has decided to save up for a new swimming pool. They want to save $14,000 in four years. They find a savings account for which interest was compounded monthly at 7.6%. How much will they have to deposit each month to meet this goal?

The hyperinflation in Germany between the two World Wars had inflation rates as high as 300,000%. In such an inflation, what would the purchasing power of a mark be after 1 year?

Stephen wants to make an investment that will have a real growth rate of 15%. If the current inflation rate is 5.4%, what annual interest rate will he need to get on his investment to accomplish his goal?

Donna made an investment with a 3% annual yield. The effective growth rate over the first year was 0%. What was the inflation rate?

If you save $350 per month in an account paying 2.75% interest compounded monthly, how much will you have in that account 12 years later?

What is the APY for 5.3% compounded quarterly?

Marlene made an investment with a 12% annual yield. However, the real growth rate of her investment was only 6.5%. What was the inflation rate?

Matthew made an investment with an 8% annual yield. However, the real growth rate of his investment was only 5%. What was the inflation rate?

In 1960 the inflation rate was about 5.1%. If you invested in a savings account with an annual interest rate of 4.9%, what was the real growth rate of this investment?

Use the geometric series formula to find the sum $1 + \frac{3}{ 10 } + \frac{3}{100 } + \frac{3}{1000}$ Express the answer as a decimal.

Use the following information to solve the Questions: You want to invest a lump sum at 5% interest so as to have $100,000 in 20 years. -If instead you find an investment with daily compounding, how much less would you need to invest than the amount in Question 39?