Nt1310 Unit 1 Assignment 1

Words: 1978
Pages: 8

1. What is the difference between a. and a. Introduction In the proposed situation, $2000 in the bank must increase to at least $5000 after the duration of 6 years, from the start of grade 7 to the end of grade 12. The issue that arises is based on what type of interest should be used to maximise profits after the set period of time. The methods of interest that are provided are simple interest, compounded annually, compounded monthly, and compounded daily. However, the rates for each type are different, affecting the final outcome after the set time. External factors in which the money must be withdrawn earlier or later have to be accounted for too, as the circumstances can potentially change. The given interest rates are: • Simple Interest – 12% • Compounded Annually – 7% • Compounded Monthly – 9% • Compounded Daily – 3%

2. What is the difference between a'smart' and a'smart'? Formulate 2.1 Mathematical techniques/concepts To complete the task, a series of calculations must be conducted to calculate the total amount of interest accumulated over the 6-year period. The mathematical equations associated with the task are the simple interest formula and compound interest
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This is the second highest profiting interest type, falling just behind simple interest by $14.89. However, it proved to yield higher interest than annual compounding due to the 2% increase of interest along with the higher frequency of compounding. To elaborate, annual compounding only gains interest at the end of each year, whereas monthly compounding gains interest at the end of each month, accelerating the growth of the investment. Though still lower than simple interest and falling far behind the desired goal of $5,000, monthly compounding displays a noticeable upward curve on the data graph, revealing its potential for higher returns over longer