Alternative Savings Offers Five-Year Term Deposits at 10% Compounded Annually

question 12

Essay

Alternative Savings offers five-year term deposits at 10% compounded annually while your credit union offers such deposits at 9.6% compounded quarterly. If you have $1000 to invest, what is the maturity value of your deposit
a) at Alternative Savings?
b) at your credit union?

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Definitions:

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean.

Standard Deviation

An indicator of the spread or fluctuations in a data set, showing the degree to which the data points deviate from the average value.

Parameter

A numerical characteristic of a statistical population, such as a mean or standard deviation, that describes some aspect of the population.

Simple Random Sample

A sample in which each member of the population has an equal chance of being selected.