Financial Report Worksheet
Directions: Complete the financial report worksheet to help you with your calculations to create the APA report.
1. Go to your financial institutions website or a local financial institution website and find the interest rate and compounding frequency (monthly, quarterly, annually, etc) for a savings account. Record that here:
2. Use the compound interest formula: where r is the rate as a decimal, n is the number of times it is compounded in the time frame, t is the amount of time and P is the starting value. Calculate your balance if you invest $1,000 for 1 year.
3. Using the compound interest formula Calculate your balance if you invest $1,000 for 5 years.
4. Now select a new compounding period (monthly, quarterly, annually, etc) and redo your calculations from number 2 & 3.
5. Now select a new interest rate from another financial institution that is different than your starting one. Redo your calculations from number 2 & 3 with the new rate but keeping the same frequency it is compounded.
6. What did you learn about comparing the compounding frequency that interest is compounded?
7. What did you learn about comparing the interest rate?
8. Is it better to have a slightly higher rate or have interest compounded more often?