Kensin longs to own a Maserati. He can afford $40,000 for a car. If this year's model sells for $135,000 and will depreciate at 10% a year, in how many years will he be able to afford this model Maserati?
Assume you have $1,000 and a place to invest it that will give you 5% compounded annually.
a. How long will it take your investment to be worth $1,500?
b. Is it worth your while to run around and find another place which will give you 5% interest compounded daily? Explain your answer.