Datasheet

Saving for a Rainy Day Activity
Investing for the future is usually the last thing on a person’s mind when they are
just entering the workforce. Paying bills, buying groceries, and purchasing a home
are usually at the top of the list. However, putting money away in some form of
savings should be the number one priority of every budget. Social security and
retirement plans are often not enough to allow a person to continue to afford their
current lifestyle.
In this activity, you will investigate how much a single investment will earn, calculate
the balance of an account with a given monthly payment, and determine the
investment amount that is needed to reach a specific financial goal.
Questions
The future value of an annuity can be calculated using the following formula:
() []
1i1
i
P
A
n
−+=
Where
A is the ending balance, P is the principal, i is the rate of interest, and n is the
number of times the interest is calculated.
1. What would be the future value of an annuity if $1000 is invested yearly for 5
years at 2.5% APR?
_________________________________________________________________
2. What would be the future value of an annuity if $1000 is invested yearly for 5
years at 4% APR?
_________________________________________________________________
3. What would be the future value of an annuity if $1000 is invested yearly for 5
years at 10% APR?
_________________________________________________________________
4. What would be the future value of an annuity if $10,000 is invested yearly for
5 years at 2.5% APR?
_________________________________________________________________
Activity 2 • Algebra II with the Casio fx-9750GII