Chapter 5

Question 1

Jacob Lee invested $600 in a savings account paying 8% interest compounded twice per year. What will his investment balance be at the end of the year? Round to the nearest Dollar.

Compound Interest = Initial Investment * (1+ Periodic Interest Rate)^n

Answer 1

$649

Question 2

Do you want $740 now or $1000 three years from now?

Answer 2

Depends on the interest rate