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Making an Investment WebquestIntroductionYou are about to make an important financial decision. You have been given $500 for your eighth grade graduation on the condition that you invest at least half of it in a CD (certificate of deposit) not to be withdrawn for a minimum of 20 years. You will learn about compound interest and how it can make your initial deposit grow. Through this quest, you will be able to determine the savings option which will result in the greatest account balance 20 years from now.AssignmentEach group of students will investigate the simple interest formula. Students will be able to identify the formula and provide a real life application.Students will research the compound interest formula and show what happens when money is invested in accounts with the same interest rate, compounded at varying intervals throughout the year. Use the questions below to guide you in your quest for information to prepare your poster. You must include a table and graph for each amount invested. Excel may be used to create your tables and graphs. You may include other information if you wish. At the conclusion of this investigation, your group will present at the annual Education Fair, sharing which investments options provide the greatest earning potential over a span of 20 years. This is a group project and will be graded according to the rubric provided.A. Understanding simple interest will help you expand your knowledge of percentages and build upon it as you learn about compound interest.What is the general formula used to find simple interest?What does each variable in the formula represent?How might simple interest connect to a financial situation? In other words, would simple interest be used when borrowing or loaning money?Provide an example where simple interest might be used.B. Determining the appropriate formula to use and adjusting it according to the frequency in which the interest will be compounded will help you determine which investment option is best.What is the general formula used to find compound interest?What does each variable in the formula represent?What does the equation for the scenario presented above look like if you choose to invest all $500 and the interest is compounded annually? Twice a year? Quarterly?Beauchemin Bank is offering a CD at an interest rate of 1.59% compounded annually and Bank of Beauchemin is offering a CD at an interest rate of 1.5% compounded monthly. At the end of 20 years, which investment yields the greatest return? Include a table and a graph.C. Assume that you want to buy a car in 20 years. The car costs $20,000 and you will use the balance of the CD towards the down payment. In order to get the best (lowest) interest rate, you must make a down payment of 5%. If you invested your money in Beauchemin Bank’s CD, would you have enough money down to get the best interest rate on the car loan?If you do not have enough money, how much money will you need to come up with to get the best interest rate?What types of interest rates would you look for when investing money? What types of interest rates would you look for when taking a loan? Why?Resources The following resources can be used to help guide you to the answers to the questions above. The resources are a guide to your research and you are encouraged to explore further. You may search other websites and include additional information in your project. you wish to learn more about CDs, you can visit: ConclusionYou will learn about calculating compound interest, and how different periods of compounding can affect the balance of your account. You can use this information to make wise investments in the future and understand the value of saving. ................
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