Investment Problem

Riley and Louie each have $5,000 to invest. They both invest at a 2.5% simple interest rate.

Part A

Riley keeps her money invested for 7 years. How much interest will she earn?

After those 7 years how much will her investment be worth?

Part B

What is the value of Louie’s investment if he invests for 3 years, then removes and spends $1,000, and then

invests what is remaining for 4 more years at a rate of 4%? Show all of your work and explain your

reasoning.

This problem is continued on the next page

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Part C

Using the information from parts A and B, who has more money in 7 years, Louie or Riley? Explain your

reasoning.

Reflection:

Think back to the plan you developed for Part A during the Pre-Write section. Now that you have had time to

work out the problems and to review the process, does the plan you developed match the work you

completed? Explain how creating the plan helped in solving the problem. If your plan did not match the work

you completed, determine if you need to adjust the plan or adjust your work. Explain what you did. If you

were able to give advice to future students, what would be one mistake you would advise them to avoid for

one of those concepts?