Quantitative Reasoning: Power of Compounding Project

Part A

1. Without thinking about it too hard, which choice would you pick? Why? (2 points)
   
2. Compound Interest Comparison Table (Paste it here) (5 points)
3. Look at row 31 and compare the total for option 1 found in the third column to the total for option 2 found in the fifth column. What do you observe about the final totals for the two choices? Would you now change your mind about which option to pick? (2 points)
4. Based on the Compound Interest Comparison Table , answer the following questions: ( 3 points)

• At what day in your table does the total amount in the fifth column become larger than the total amount in the third column?

• What do you observe about the growth of the total in the fifth column after this day to the growth of the total in the third column?

• Use the table to explain why constant growth can never compete with compound growth given enough time.

1. Paste your three charts here. (15 points)
2. Provide Explanations (3 points) :

• When you look at chart 1 you observe that constant growth dominates exponential growth for days 1 to 10. Briefly explain why this makes sense.
• When you look at chart 2, you again observe that constant growth dominates exponential growth for days 11 to 20, but as time progresses the domination weakens. Briefly explain why this makes sense.
• When you look at chart 3, you now observe that exponential growth begins to dominate constant growth, and as time progresses this domination becomes dramatic. What is causing this dramatic change?

Part B

1. Paste your completed Estimated Doubling Time in Years table here . (5 points)
2. Paste your completed Rule of 70 Doubling Time table here. (5 points)
3. Paste your Doubling Time versus APR chart here. (5 points)
   Describe the relationship between the interest rate and the doubling time from the "Doubling Time versus APR" chart. Use the idea of "correlation" discussed in Module 4. For what interest rates is the decrease in the doubling time more dramatic? (2 points)
4. Paste your Total Value of a $1000 Investment over 25 Years at Various Interest Rates chart here. (5 points)

Part C

1. Place your completed Population table here. (5 points)
2. From the table predict in which year that Nigeria 's population will exceed Russia 's population, assuming that the current trends continue. (2 points)
3. List one political factor, one social factor and one health related factor that could affect the validity of your prediction in 2? (2 points)
4. Paste your Population chart here. (5 points)
5. From the chart (4 points) ,

• Discuss the political and economic impact of the growth rate on the Nigerian population over time. ‘
• Compute the percent change in the Nigerian population from 1998 to 2010. Use the data in the Population table above.
• Discuss the political and economic impact of the decline rate on the Russian population over time.
• Compute the percent change in the Russian population from 1998 to 2010. Use the data in the Population table above.

Price: $23.22

Solution: The downloadable solution consists of 12 pages, 1122 words and 6 charts.
Deliverable: Word Document