Suppose you want to accumulate $120,000 for your retirement in 30 years.
Consider these two plans:
Plan A: make a single deposit into an
account with an annual compounding and
an APR of 5%.
Plan B: Make a single deposit into an account with continuous compounding and
an APR of 4.8%
1.) how much do you need to deposit in
each amount in order to reach the goal?
2.) calculate the current APR the
compounding period, and the claimed APY
for your personal savings account. (Or pick
a rate from a nearby bank)
3.) calculate the APY on your account (or
someone u know)
4.) Does your calculation agree with the
APY claimed by the bank?