When you graduate from college and find your first full-time job, you remember what you learned about compound interest and manage to save $10,000 during your first year of work. You shop around for a good investment to park your money for 45 years and find two options: I.
Option 1: CityBank offers 7.5% interest compounded annually. Option 2: Charles Swab offers 7.25% interest compounded daily.
Find the future value of your money, if you choose to deposit your money at CityBank for 45 years. (3 points total)
a. Identify P, r, t and n. (1 point)
b. Calculate the value of the money after 45 years. Show your work. (2 points)

II. Find the future value of your money after 45 years if you choose to deposit your money at Charles Swab. (3 points total)
a. Identify P, r, t and n. (1 point)
b. Calculate the value of the money after 45 years. Show your work. (2 points)
III. Which of the two banks would you ultimately deposit your money with? Why? (2 points)

IV. While trying to decide between the two banks, your friend recommends another bank called TB Bank. The bank is offering a simple interest rate of 20%!
a. Find the final value of the $10,000 deposit after 45 years. (2 points)
b. Explain to your friend why TB Bank is not the best option? (2 points)