Part I 1. Suppose you have $5000 to invest at age 20. You have the choice of depositing your money in
any of the three money market accounts described below. Assuming you will leave your money in
the account until retirement (age 65) calculate your final balance.
a) Account A: b) Account B: c) Account C:
8.25% annual interest 7.80 % annual interest 8% annual interest
compounded monthly compounded continuously

d) Which account will yield the most amount of money?
2. Calculate the number of years you would need to leave your $5,000 in each of the money market
accounts described above if you need $150,000 in the account. (Write your answers to the nearest
tenths. You will need to use logarithms to find your answers.)
a) Account A b) Account B c) Account C

Part II pg 2
3. Assume you choose Account C and you invest your $5,000 in the money market account that
pays 8 % interest per year compounded continuously.
a) Write a general equation that can be Equation:
used to model this situation at any given age.
(Note: t = 0 represent the year you are age 20.)