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Investing Right

Isabella De La Rosa
Jennifer Adame
Narda Martinez

Vocabulary:
Compound Interest: Interest that accrues on the initial principal
and the accumulated interest of a principal
deposit, loan or debt.
Annual Percentage Yield: The effective annual rate of return
taking into account the effect of
compounding interest.
Savings Account: A deposit account held at a bank or other
financial institution that provides principal
security and a modest interest rate.

Vocabulary:
Money Market Account: A savings account that offers the competitive
rate of interest (real rate) in exchange for

larger-than-normal deposits.
Individual Retirement Account: An investing tool used by individuals
to earn and earmark funds for

retirement savings.
Certificate of Deposit: A savings certificate entitling the bearer to
receive interest. A CD bears a maturity date, a

specified fixed interest rate and can be issued

in any denomination.

Banking Institutions:
Isabella:

Narda:

Jennifer:

To Be Considered:

The Annual Percentage Yeild (APY) of each type of account.

Is the interest rate being applied annually, daily, quarterly, etc.
In the institution chosen, is a particular account best for an
individual person or a business.
Will you have a necessity to withdraw money at any moment?

Which Is The Best:

Money Market Account(MMA):

Firstmark Credit Union

Savings Account(SA):
Firstmark Credit Union

Certificate of Deposit(CD):
CHASE

Savings Account:
Interest Rate:
a. 1 year

b. 5 years

P(1)= 2,000 (1+.005/1 )*1

= 2,000 (1.005)

P(1)= 2,000 (1+.005/1 )*5

(1.025)

= 2,000

c.10 years
P(1)= 2,000 (1+.005/1 )*10
= 2,000 (1.05)
= $2102.28

=$2050.50

= $2010.00

d.20 years
P(1)= 2,000 (1+.005/1 )*20
= 2,000 (1.105)
= $2209.80

e. 45 years
P(1)= 2,000 (1+.005/1 )*45
= 2,000 (1.25)
= $2503.24

Chart:

Money Market Account:

a. 1 year
P(1)= 2,000 (1+.0035/1 )*1
= 2,000 (1.0035)
=$2007.00

b. 5 years
P(1)= 2,000 (1+.0035/1 )*5
= 2,000 (1.02)
=$2035.25

d.20 years
P(1)= 2,000 (1+.0035/1 )*20
= 2,000 (1.07)
= $2144.75

c.10 years
P(1)= 2,000 (1+.0035/1 )*10
= 2,000 (1.04)
=$2071.11

e.20 years
P(1)= 2,000 (1+.0035/1 )*20
= 2,000 (1.17)
= $2144.75

Chart:

Certificate of Deposit:
a.1 year
P(1)= 2,000 (1+1+ .002/365 )*365*1
= 2,000 (1.00)

= $2,004.00

b.5 years
P(1)= 2,000 (1+1+ .002/365 )*365*5
= 2,000 (1.04)
= $2,076.42

d.20 years
P(1)= 2,000 (1+1+ .002/365 )*365*20
= 2,000 (1.30)
= $2,568.04

c.10 years
P(1)= 2,000 (1+1+ .002/365 )*365*10
= 2,000 (1.03)
= $2,266.29

e. 45 years
P(1)= 2,000 (1+ 1+ .002/365)*20
= 2,000 (1.80)
= $3,510.08

Chart::

Individual Retirement Account:

a.1 year
P(1)= 2,000 (1+.0025/1)*1
=
2,000(1.0025)
= $2005.00

b. 5 years
P(1)= 2,000 (1+.0025/1 )*5
= 2,000 (1.01)
= $2025.13

d.20 years
P(1)= 2,000 (1+.0025/1 )*20
= 2,000(1.05)
= 2,000
=$ 2012.41

c .10 years
P(1)= 2,000 (1+.0025/1 )*10
= 2,000(1.03)
= $2050.51

e.45 years
P(1)= 2,000 (1+.0025/1 )*45
= 2,000(1.12)
=$ 2237.83

Chart:

Double The Amount:n and best

Money Market Account(MMA):
Firstmark Credit Union
Savings Account(SA):
Firstmark Credit Union
Certificate of Deposit(CD):
Firstmark Credit Union
Individual Retirement Account(IRA):
Firstmark Credit Union

Money Market Account:

4000= 2000(1+.0035/1)^t
4000/2000
2=(1.0035)^t
log(2)=log(1.0035)*t
t=198.39 years

Savings Account:
4000= 2000(1+.0050/1)^t
4000/2000
2=(1.005)^t
log(2)=log(1.005)*t
t=138.98 years

Certificate of Deposit:
4000= 2000(1+.0065/1)^t
4000/2000
2=(1.0065)^t
log(2)=log(1.0065)*t
t=106.98 years

Individual Retirement Account:

4000= 2000(1+.0025/1)^t
4000/2000
2=(1.0025)*t
log(2)=log(1.0025)*t
t=120.56 years

When $300 Are Added:

$300 compounded a month:

$300 not compounded:

12: 5600.56
13:6392.306
14:7234.057
15:8125.813
16:9067.573
17:10059.34

12:5600.00
13:5900.00
14:6200.00
15:6500.00
16:6800.00
17:7100.00
18:7400.00
19:7700.00
20:8000.00
21:8300.00
22:8600.00
23:8900.00
24:9200.00
25:9500.00
26:9800.00
27:10100.00

Citations:
"annual percentage yield." Investopedia. Web. 21 Mar. 2012.
"certificate of deposit." Investopedia. Web. 21 Mar. 2012.
"Chase.com." Chase.com. N.p., n.d. Web. 1 Mar. 2012.
"compound interest" Investopedia. Web. 21 Mar. 2012.
"individual retirement account" Investopedia. Web. 21 Mar. 2012.
"Logo." Firstmark Credit Union. NCUA. Web. 20 Mar. 2012.
"Logo." Wells Fargo. Equal Housing Lender. Web. 20 Mar. 2012.

"money market account ." Investopedia. Web. 21 Mar. 2012.

"savings account" Investopedia. Web. 21 Mar. 2012.