1. Triple Town Bank pays 3.8 percent simple interest on its savings accounts. Do

ID: 2624508 • Letter: 1

Question

1. Triple Town Bank pays 3.8 percent simple interest on its savings accounts. Doubleton Bank pays 3.5 percent

interest, compounded annually on its savings accounts. Sixteen years ago, Jake invested $2,000 in each bank.

What is the difference, if any, in his account balances today?

2. According to the Rule of 72, what rate of interest must you earn to double your money in 5 years?

3. Which one of the following relationships is correct, all else held constant?

a. The future value and the present value are inversely related.

b. The future value increases as the interest rate decreases.

c. The present value is directly related to the time period.

d. The interest rate and the time period are inversely related.

1.) Doubleton Bank - $3468

Triple Twon Bank - $3216

Hence Doubleton bank pays $252 more.

2.) Rule of 72. Rate of interest to double in 5 years = 72/5 = 14.4%

3.) The interest rate and the time period are inversely related.

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.