Chapter 9 Mixed Practice What’s the difference between compound interest and annuities?

Chapter 9 Mixed Practice

What’s the difference between compound interest and annuities?

Taylor has $20 left over every month after she pays her bills. She decides to put the money into an account earning 1.75% APR at the end of each month. How much will she have in 5 years if she continues saving $20 a month?

At the end of the summer, Kyle decides to invest his summer earnings into a CD earning 2.3% compounded monthly. If he made $1250 per month for each of the three months of summer, how much will he have when his CD matures in 5 years?

What’s the difference between continuous compounding and installment loans?

Ed decides to buy a new car and take out a loan through the car dealership. He negotiated a sale price of $21,500 after his trade-in was considered. The dealership is offering 3.2% interest on all five-year new car loans.

What will his monthly payment be?

How much he interest will he pay over the life of the car loan?

Katelyn received $5400 cash for wedding gifts from her rich relatives. She and her new husband want to invest 40% in an account earning 2.1% interest compounded continuously. The remaining 60% will go in a Money Market account earning 2.75% interest compounded quarterly.

How much money will each account have at the end of 10 years?

Katelyn is hoping to have enough money to make a $10,000 down payment on a house at the end of the 10 years. Will she have enough money?

Find the APY for each account. (NOTE: Use only the simple, general compounding, or continuous compounding formulas for APY.)

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