Stanford Simmons, who recently sold his Porsche, placed
$10 comma 00010,000
in a savings account paying annual compound interest of
66
percent.
a. Calculate the amount of money that will have accrued if he leaves the money in the bank for
11,
55,
and
1515
years.
b. If he moves his money into an account that pays
88
percent or one that pays
1010
percent, rework part a using these new interest rates.
c. What conclusions can you draw about the relationship between interest rates, time, and future sums from the calculations you have completed in this problem?