Situation
You are a financial advisor. Your clients include young couples who are looking for financial advice. During this pandemic, everyone is looking for the best option when saving their money. As a financial advisor, you help people determine the best options for their savings plan. Most banks offer saving plan options with compound interest.
The Jacksons
Eric and Amy Jackson wish to invest in a no-risk savings account. They currently have $55,000 in an account that has a 4.125% annual interest rate, compounded continuously. They have the following options:
a. keep their money in the account they already have
b. invest the money in an account that has 5% annual interest, compounded annually
c. invest the money in an account that has 4.5% annual interest, compounded quarterly
d. invest the money in an account that has 3.875% annual interest, compounded monthly
Write a function for each option, that represents the amount of money in the account after t years after the account is opened.
a. C(t) keep their money in the account they already have
b. A(t) invest the money in an account that has 5% annual interest, compounded annually
c. Q(t) invest the money in an account that has 4.5% annual interest, compounded quarterly
d. M(t) invest the money in an account that has 3.875% annual interest, compounded monthly