# Compound Interest & Statistics

**Question description**

**Compound Interest **

In this and future Instructor Graded Assignments you will be asked to use the answers you found in the Unit 1 Assignment.

Note: For these questions you need to cite a reliable source for information, which means you cannot use sites like Wikipedia, Ask.com®, and Yahoo® answers. If you do use those sites the instructor may award 0 points for your response.

The Assignment problems must have the work shown at all times. The steps for solving the problems must be explained. Failure to do so could result in your submission being given a 0. If you have any questions about how much work to show, please contact your instructor.

Assignments must be submitted as a Microsoft Word® document and uploaded to the Dropbox for Unit 6. Please type all answers directly in this Assignment below the question it applies to.

All Assignments are due by Tuesday at 11:59 PM ET of the assigned Unit.

Note:
All interest rates are to be assumed to be **yearly**
interest rates.

**Question 1**(10
points)

1. You decide to invest $15000 into a bank account that that is compounding its interest monthly. Assuming the bank is paying out an interest rate of the current prime rate - 1% (In the event that prime - 1% is less than 1%, use 1%), and the investment is for 5 years

a) How much money (total) do you have after the 5 years pass?

b) How much do you earn in interest over the 5 years?

**Question 2**(10
points)

2. You wish to have $500,000 saved up in 30 years. Assuming that you can get an interest rate of prime + 5% on your investment (compounded quarterly.)

a) How much do you need to invest today to have $500,000 30 years in the future?

b) How much of that total is interest?

**Question 3**(10
points)

3. You borrow $50,000 at 5% interest (compounded daily).

a) After 1 year passes, you pay off $25000 of the loan. How much do you still owe on the loan?

b) After another year passes, you wish to pay off the loan. How much do you need to pay to pay it off?

**Essay**

(15 points)

4. While everyone dreams of high interest rates for investments, usually high interest rates come with other disadvantages. Using the interest or other sources, research and write an essay on the advantages and disadvantages of higher interest rates on investments. Look at factors like risk, reward, and possible other things that would change to balance out the higher interest rates.

__Requirements for essay__

· Write your essay in this document – do not save it in a separate file.

· You must clearly state your position with well-structured paragraphs using proper grammar, spelling, and sentence structure.

· This is not an “opinion” question – you must offer evidence to support your position, using properly-cited sources.

· Your answer must be between ¾-1 page in length.

· You must cite and reference at least one source (book, website, periodical) using APA format. The required website counts as one source.

**Statistics **

In this and future Instructor Graded Assignments you will be asked to use the
answers you found in the Unit 1 Assignment.

Note: For these questions you need to cite a reliable source for information, which means you cannot use sites like Wikipedia, Ask.com®, and Yahoo® answers. If you do use those sites the instructor may award 0 points for your response.

The Assignment problems must have the work shown at all times. The steps for solving the problems must be explained. Failure to do so could result in your submission being given a 0. If you have any questions about how much work to show, please contact your instructor.

Assignments must be submitted as a Microsoft Word® document and uploaded to the Dropbox for Unit 3. Type all answers directly in this Assignment below the question it applies to.

All Assignments are due by Tuesday at 11:59 PM ET of the assigned Unit.

**Data Sets and Graphs**

(Questions 1 - 6 are worth 5 points each.)

1. Using your link for the national average of gas you found in Unit 1, state the average prices of gas for each month, for the last year that full data exists (for instance, if you are working this Assignment in October of 2013, you would use January 2012 - December 2012 as that is the last full year with data).

2. Find the mean of your data set in question 1.

3. Find the median of your data set in question 1.

4.
Find the standard deviation of your data set in question 1. You may use Microsoft
Excel to compute the standard deviation.

**Note:** If you use Microsoft Excel to
compute the standard deviation, show for your work the formula that you entered
into Microsoft Excel, and then the answer Microsoft Excel gave you.

5. Create a histogram or bar graph of your data set in question 1. Post your graph below.

6. Find a circle graph or bar graph online and post the graph below, then state what the graph is supposed to convey. What is the purpose of the graph? Does it convey, in your opinion, its intended message? Why or why not?

**Essay Question**

(15 points)

7. Statistics are often used in misleading ways. Using the internet, find an example of a statistic that you feel is misleading. Write an essay below where you state what the statistic is, what it is supposed to be measuring or representing, and why you think it is misleading. Is there a way to improve the statistic so that it is no longer misleading? Suggest some plausible ideas for improvement.

__Requirements for essay__

· Write your essay in this document – do not save it in a separate file.

· You must clearly state your position with well-structured paragraphs using proper grammar, spelling, and sentence structure.

· This is not an “opinion” question – you must offer evidence to support your position, using properly cited sources.

· Your answer must be between ¾-1 page in length.

· You must cite and reference at least one source (book, website, periodical) using APA format. The required website counts as one source.

Data needed for statistic

1. Using the internet, find a link that will tell you the average price of a gallon of gas for a given time period.

http://www.eia.gov/forecasts/steo/

2. Using the internet, find a website that will show you houses for sale.

3. Find a website that shows one how to do fraction to decimal conversions.

4. Using the internet, find a website that one can use to find the national average cost of food for an individual, as well as for a family of 4 for a given month.

http://www.cnpp.usda.gov/reports-publications

**For statistic use year January 2014-December 2014**

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