Avery wants to buy a car and has a choice between two different banks. One bank is offering a simple interest rate of 32% and the other bank is offering a rate of 3% compounded annually. If Avery decides to deposit $7,000 for 5 years, which bank would be the better deal?

If Avery decides to deposit $7,000 for 5 years, the bank would be the better deal would be bank is offering a rate of 3%

compounded annually

Step-by-step explanation:

In order to calculate which bank would be the better deal If Avery decides to deposit $7,000 for 5 years, we would have to make the following calculation:

simple interest rate of 32%.

Therefore, I= P*r*t

=$7,000*32%*5

=$11,200.

compound interest rate of 3%

Therefore, FV=PV(1+r)∧n

FV=$7,000(1+0.03)∧5

FV=$8,114.

If Avery decides to deposit $7,000 for 5 years, the bank would be the better deal would be bank is offering a rate of 3%

compounded annually

answer:

payment just for service  

→

$

87.12

payment for service including tax

→

$

94.09

explanation:

service only with 20% tip  

→

$

72.6

(

1

+

20

100

)

=

$

87.12

in the opening of the question the word 'service' is associated only with the pretax value.

the closing part of the question asks: how much did she pay for the  

service

−−−−−−  

so technically the answer is  

→

$

72.6

(

1

+

20

100

)

=

$

87.12

however, the intention of the question provider may have been that your answer is to be  

$

87.12

(

1

+

8

100

)

=

$

94.09

to 2 decimal places.

'

payment just for service  

→

$

87.12

payment for service including tax

→

$

94.09

tony b

mar 21, 2017

answer:

trying to explain it another way

explanation:

service charge  

.

→

$

72.60

20% tip  

20

100

×

$

72.60

=

$

14.52

−−−−−−  

←

add

$

87.12

tax  

8

100

×

$

87.12

=

$

6.97

−−−−−  

←

add

$

94.09

related questions