# Maria get $50 on 16th bd and$70 on 17th bd HELP

1. Mar 18, 2005

### aisha

Maria received $50 on her 16th birthday, and$70 on her 17th birthday, both of which she immediately invested in the bank with interest compounded annually. On her 18th Birthday, she had 134.97 in her account. Draw a time line and calculate the annual interet rate.

How would you draw a time line for this problem?

$50__________$70______________FV
16th_________17th_____________
................................................50(1+i)^16
...........................70(1+i)^17

How do u calculate the annual interest rate?

2. Mar 18, 2005

### shmoe

Why are you raising those values to the power 16 and 17? Interest is annual and her 16th birthday money gets 2 years of interest, the 17 year money gets one year.

Find the future values of her 50 and 70 when she's 18. This expression will have some (1+i) terms in it. Equate it to the 134.97 amount and solve for i. You'll need to solve a quadratic (like the rrsp question)