Task:
On the first day of 7th grade, your rich uncle, Mort, encouraged you to save $30 of your allowance each month. On the first day of 8th grade, you receive the following email from Uncle Mort. "I am proud that you have been saving. I will pay you 10% on the balance that you saved in 7th grade and 10% on the balance of your savings at the end of each year until you graduate from high school."
Question 1. Calculate how much money you will have at the end of each school year. Show your work. Complete a table like the following:
Grade Level Savings
7 ?
8 ?
9 ?
10 ?
11 ?
12 ?
Question 2. Suppose Uncle Mort's letter had said that he would compound the interest semiannually, how much money would you have when you graduated from high school? Use a formula or make a table. Show your work.
Question 3. Are the ending balances for #1 and #2 the same or different? Explain why.