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March 7th, 2017, 03:17 PM  #1 
Newbie Joined: Mar 2017 From: New Jersey Posts: 7 Thanks: 0 Math Focus: Algebra  Representing as a Function problems
Hello! I am looking for explanations for the following 2 problems: 1.) Fresh Bank offers a savings scheme that accrues simple interest annually based on an initial deposit of $1000. If S(t) represents the money in the account at the end of t years and S(7) = 1350, write a function that could be used to determine the amount of money in the account over time. 2.) Campus Ban offers savings account that accrues compound interest annually at a rate of 3% What is the initial amount needed in this account so that it will have the same amount of money at the end of 15 years? Thank you in advance. 
March 7th, 2017, 05:43 PM  #2 
Senior Member Joined: Sep 2015 From: USA Posts: 1,982 Thanks: 1027 
Assuming annual accrual of interest at rate $r$ $V(t) = 1000(1+r)^t,~\text{t in years.}$ $V(7) = 1350 = 1000(1+r)^7$ $1.35 = (1+r)^7$ $(1.35)^{1/7} = 1+r$ $r = (1.35)^{1/7}1 \approx 0.0438$ $V(t) = 1000(1.0438)^t$ 
March 7th, 2017, 05:46 PM  #3  
Senior Member Joined: Sep 2015 From: USA Posts: 1,982 Thanks: 1027  Quote:
If you want to have the same amount of money in 15 yrs as you start with then you have to start with 0. Somehow I don't think that's what the problem means. Could you make it clearer?  
March 8th, 2017, 05:16 AM  #4  
Newbie Joined: Mar 2017 From: New Jersey Posts: 7 Thanks: 0 Math Focus: Algebra  Quote:
The problem originally said : Part B: Alternatively, Campus Bank offers savings account that accrues compound interest annually at a rate of 3% What is the initial amount needed in this account so that it will have the same amount of money at the end of 15 years? So we should assume that its related to problem A. I think the question is asking what amount of money you need in order to get back the investment you put in 15 years. Sorry if I didn't make it clear enough last time!  
March 8th, 2017, 12:34 PM  #5 
Global Moderator Joined: Dec 2006 Posts: 19,066 Thanks: 1622 
(1). S(t) = 1000 + 50t (2). The target number of dollars is 1000 + 50*15 = 1750. If you invest \$1123.25 at 3% (rounded) annual compound interest, it will have grown to \$1750.01 after 15 years. 

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