Financial Maths DI

Draft Due: 31 July 2015

Final Due: 7 August 2015

Introduction
In this DI the grandparents are putting in $2000 into a bank which has Simple Interest and
Compound Interest. The programs that are going to be used in this DI is Google Classroom,
Google Drive, Google Sheets and Google Docs. We need to find out if we want to go with
Simple Interest or Compound Interest. We are also going to see what is better at 4 years and
what is better at 10 years.

Mathematical Investigation On Google Sheets

Analysis/Discussion
The balance after 10 years for each investment is, (Simple: $3150, Compound: $3211). The
difference between the Simple Interest rate and Compound Interest rate is 1.94%. This make
you gain $61 if you go with the Compound Interest.
The balance after 4 years for each investment is, (Simple: $2460, Compound: $2417.15). The
difference between the Simple Interest and Compound Interest is 1.77%. This will make you
gain $42.85 if you go with the Simple Interest.
The difference between the Simple Interest and Compound Interest is that going with
Compound Interest for the 10 year period is better because you will get $61 more than what you
would get with Simple Interest. But if you go with 4 years Simple Interest is better because you
will get $42.85 more than what you would get with Compound Interest.
What are the Advantages and Disadvantages.
Advantages
The advantages are that if you stay with the 10 years you will gain $1211.55 from the $2000
which will give you a total of $3211.
Disadvantages
The disadvantages are that if want to get out of the 10 year contract you'll probably have to pay
money to get out of it so that means you could basically be paying back the money you got for
having the 10 contract.
If the investment was to continue the best choice would be to go with the Compound Interest
because as you can see that the Compound interest after 10 years has more money so you
would think that it would continue to get higher and higher.
Conclusion