How much money will you have saved in two year’s time?

Here are the three things I need:

o The linear equations: y = mx + b

o The chart for the points with the necessary formulas

o The linear equations graphed on the same coordinate system. Note, make sure you have enough points so that the lines cross.

When (at how many minutes of usage) will Plan A and Plan B cost the same?

When (for what range of minutes) will Plan A cost less, and when (for what range of minutes) will Plan B cost less?

Use Spreadsheet / formulas

Excel Spreadsheet #1

Select one of the options below and create a linear equation to represent the monthly bill for each Plan A and Plan B, you will have two equations, one for each plan. Find the common number of minutes at which both Plan A and Plan B cost the same amount. This number of minutes is called the break-even point. Which plan costs more before the break-even point and which cost more after the break-even point.

Option 1: Plan A $39.99 for 200 min and $1.25 for each min after. Plan B $29.99 for 200 min and $1.50 for each min after.

Option 2: Plan A $25.75 plus $.75 per min. Plan B $20.99 plus $1.00 per min

Option 3: Plan A $39.99 plus $1.25 per min. Plan B $25.99 plus $1.75 per min

Option 4: Plan A $45.99 for 400 min and $.50 for each min after. Plan B $49.99 for 400 min and $.40 for each min after

Spreadsheet #2 Excel

Calculate the amount accruing when regular payments are made into an interest bearing account – often called the Savings Plan formula.

(A is the accrued amount after t years of making regular payments, PMT, into an account at interest rate, r%, compounded n times each year.)

A(t) = PMT·((1 + r/N)N·t – 1)/(r/N)

= PMT*((1 + r/N)^(N*t) – 1)/(r/N)

The second version is essentially in the form used in Excel

Suppose you want to buy a car and have decided that you can save $100 a month. Using information from an internet source, determine the current interest rate on savings accounts and use the information to answer the following:

1. How much money will you have saved in two year’s time?

2. How much will be interest?

3. Why wouldn’t a linear model work here?

Here is one option to research accounts that does not require personal information: NerdWallet