Classroom Resources / Problems of the Week
On December 31, 2007, Curtis and Bill each had $1000 to start saving for retirement. The two men had different ideas about the best way to save, though.
Curtis, who doesn't trust banks, put his money in a can and buried it in his back yard. He plans to continue adding $1000 to the can on the last day of each year until he is ready to retire.
Bill invested his $1000 in a bank account that will pay 10% interest annually on the last day of the year. Unlike Curtis, he does not plan to continue investing more money each year. He figures that with the interest he will earn his bank account will eventually be worth more than the money in Curtis's can.
On January 1, 2009, Bill has $1100 and Curtis has $2000. On January 1, 2010, Bill has $1210 and Curtis has $3000. Be sure that you've also answered questions 3 and 4 and explained clearly how you came up with your answers.
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