Suppose Dina is an avid reader and buys only comic books. Dina deposits $3,000 in a bank account that pays an annual nominal interest rate of 10%. Assume this interest rate is fixed-that is, it won't change over time. At the time of her deposit, a comic book is priced at $15.00.

Question

Lucas Callahan

Business

2 April, 07:19

Suppose Dina is an avid reader and buys only comic books. Dina deposits $3,000 in a bank account that pays an annual nominal interest rate of 10%. Assume this interest rate is fixed-that is, it won't change over time. At the time of her deposit, a comic book is priced at $15.00.

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Emilia Donaldson · Answer 1

Instructions are listed below

Explanation:

Giving the following information:

Dina deposits $3,000 in a bank account that pays an annual nominal interest rate of 10%. The comic book is priced at $15.00.

We don't have the number of years on the investment. But we can figure out an answer.

With $3000 she can buy:

Number of comics = 3000/15 = 200 comics.

Using the following formula we can calculate the amount of money that she will have at the end of several years.

FV = PV * (1+i) ^n

For example:

1 year

FV = 3000*1.10^1 = $3300

Comics = 3300/15 = 220 comics

5 years:

FV = 3000*1.10^5 = $5,315

Comics = 5315/15 = 354 comics