Practice #2 Answers
Using the table, answer the following questions.
Rates for Interest
Earned
(Adapted from: USA Today, 1/15/98)
|
Type of Investment |
Present |
6 mos. ago |
1 yr. ago |
|
Money Mutual Funds |
5.07% |
5.0% |
4.82% |
|
Bank Money Market |
2.53% |
2.61% |
2.60% |
|
6 month CDs |
4.81% |
4.9% |
4.76% |
|
1 year CDs |
5.09% |
5.2% |
5.04% |
|
5 year CDs |
5.42% |
5.74% |
5.53% |
- One year ago, which type of investment
had the highest interest rates? Which type had the lowest savings
rates?
- One year ago,
5-yr. CDs had the highest savings
rate.
- One year ago, the Bank Money Market
had the lowest savings rate.
- What type of investment had an interest
rate of 5.00%? How long ago did it have this interest rate?
- Money Mutual Funds had an interest
rate of 5.00%. The rate occurred 6 months ago.
- Which types of investments have had
interest rates drop from one year ago to the present day?
- Both Bank Money Market and the 5-yr.
CDs have had their interest rates drop from one year ago
to the present day.
- Which type of investment would give
you the largest return on your investment? Explain your answer.
- The 5-yr. CD
would give you the largest return on your money. At these
points, the 5-yr. CD has the largest interest earned rate, so
it would give the largest return on your money.
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