Project 2 - Saving For College with an Interest Earning Account (50 Project Points)
You are opening a CD (Certificate of Deposit - high interest savings account that must reach maturity before you can retrieve the ending balance without a penalty) to save for a graduate school you are planning to go to after college in 4 years. You have 19,400 to deposit and you are considering two options:
Co-op City Bank offers a 3-year CD that earns 1.3% APR compounded continuously.
Bronx First National. offers a 4-year CD that earns 1.4% APR compounded monthly.
a. What is the ending balance (B) for each option? (Fill-in graphic organizer for each.)
Co-op City Bank (Show use of Formula)
B=
P=
r=
t=
Bronx First National (Use NerdWallet Compound Interest Calculator)
B=
P=
r=
n=
t=
b. How much interest (I) did each option earn? (Hint: B - P=I) (Show work.)
Co-op City Bank =
Bronx First National =
c. Which option would you choose and why? (Explain using data and at least two vocabulary words.) (Hint: How much more would you earn at one bank than the other?)
