1. Eduardo's savings account earns 2.1% annual interest compounded monthly. If Eduardo has $60.19 in the account and he deposits an additional $20.00, how much interest will the account earn in a 1-month period? Round to the nearest cent.
2. Riley deposits $225 each month into an account that earns 2.4% annual interest compounded monthly. The table shows the account balance at the end of each year to the nearest dollar.
a. By the end of the fifth year, what amount has Riley deposited into the account?
b. What amount of interest has the account earned?
3. Error Analysis Damian opens a savings account by depositing $40.00 on the first day of a month. He deposits another $40.00 on the first day of each month. The account earns 1.5% annual interest compounded monthly. Damian incorrectly completes a table as shown to find his balance after 4 months.
a. Complete a table to find the correct balance after 4 months. Round to the nearest cent.
b. What error did Damian make?
4. Reasoning Eva and Luke each have a savings account. Both deposit $2,700 each year. Eva deposits $2,700 at the end of each year. Luke deposits $225 at the end of each month. Each account earns 2.4% annual interest compounded monthly. The table shows the rounded account balances at the end of each year.
a. How much more interest does Luke earn after 4 years by making monthly deposits?
b. Suppose Wyatt opens the same account but deposits $1,350 every 6 months. How would Wyatt's balance at the end of year 4 compare to Eva's and Luke's balances? Round to the nearest cent. Explain.
5. Estimation Evan deposits $200 in a savings account on the first day of each month. The account earns 2.7% annual interest compounded monthly. Evan wants to estimate the interest the account earns after 4 months. The first deposit earns interest for 4 months, the second for 3 months, the third deposit for 2 months, and the fourth deposit for 1 month, so Evan multiplies the interest earned the first month by 4+3+2+1=10.
a. Does Evan's method underestimate or overestimate the interest? Explain.
b. If the balance is $804.51 after 4 months, what is the exact interest the account earns?