document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=947994>Question 947994</A>: <I><SPAN STYLE=\"word-break: break-all;\"> You decide to invest $15000 into a bank account that that is compounding its interest monthly. Assuming the bank is paying out an interest rate of the current prime rate 3.25 - 1% (In the event that prime - 1% is less than 1%, use 1%), and the investment is for 5 years\r<BR>\n" );
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document.write( "I’m not sure  I understand this question. the current prime rate  is minus 1%?\r<BR>\n" );
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document.write( "a) How much money (total) do you have after the 5 years pass?\r<BR>\n" );
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document.write( "15,000*(1+.01)=15,150\r<BR>\n" );
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document.write( "15,150*(1+.01)=15,301.50\r<BR>\n" );
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document.write( "15,301.50*(1+.01)=15,454.52\r<BR>\n" );
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document.write( "15,454.52*(1+.01)=15,609.06\r<BR>\n" );
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document.write( "15,609.06*(1+.01)=15,765.15\r<BR>\n" );
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document.write( "The interest rate is Prime Rate (which is 3.25% at the present time)  less 1%.  \r<BR>\n" );
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document.write( "This process is not correct.  The problem is looking for a future value of an investment paying compound interest monthly, for 5 years.  The FV formula will have to be used.   Please see the textbook, Chapter 13 for the formula. \r<BR>\n" );
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document.write( "- 5 points\r<BR>\n" );
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document.write( "Okay, so I think I’ve got this now. Period interest rate = annual interest rate ÷ number of interest periods per yr\r<BR>\n" );
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document.write( "3.25-1%=2.25%\r<BR>\n" );
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document.write( "interest periods per year are 12*5 years =60 times.\r<BR>\n" );
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document.write( "2.25%/12 interest periods=.00875*5years=.009375\r<BR>\n" );
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document.write( "So we have to find the future value using the formula..\r<BR>\n" );
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document.write( "Principle+(1+rate) and so on\r<BR>\n" );
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document.write( "15,000(1+.009375)=15,140.63 future value at one year\r<BR>\n" );
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document.write( "15,140.63(1+.009375)=15,282.57         \r<BR>\n" );
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document.write( "15,282.57(1+.009375)=\r<BR>\n" );
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document.write( "b) How much do you earn in interest over the 5 years?\r<BR>\n" );
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document.write( "15,765.15-15,000=\r<BR>\n" );
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document.write( "$765.15\r<BR>\n" );
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document.write( "helppp </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #578566 by </B><A HREF=/tutors/aboutme.mpl?userid=Fombitz><B>Fombitz(32388)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Fombitz><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Fombitz><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=578566\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> I think you misinterpreted the interest rate. <BR>\n" );
document.write( "I think it's (3.25-1)% or 2.25%<BR>\n" );
document.write( "If prime is less than 1%, then use 1% since if it's less than 1 you would have a negative interest rate.<BR>\n" );
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document.write( "Since it's compounded monthly, adjust the interest rate.<BR>\n" );
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document.write( "Adjust the time periods,<BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=n=5%2A12=60 ALIGN=MIDDLE  ALT=\"n=5%2A12=60\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "So then,<BR>\n" );
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document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=F=15000%281.1189544%29 ALIGN=MIDDLE  ALT=\"F=15000%281.1189544%29\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
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document.write( "b)<BR>\n" );
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document.write( " </SPAN>\n" );
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