Your work looks great. The reason that rate from chase produces a ridiculously low amount of interest is because in the current interest rate environment interest rates are ridiculously low. Five one hundredths of a percent is a joke, but that is what banks are paying on savings accounts. With inflation at around 2% that means you are losing 2% buying power per year. The real interest rate in negative 2%. The nominal rate is .05%.

You can't get a 5% return at a bank. You need to invest in medium grade bonds or something similar with a bit of risk. I am not sure what junk bonds are yielding currently, but it is probably not far off from 5%.

Great job working the problem and you have certainly uncovered how little interest your will earn keeping your money in bank savings account. Running the formulas with 5% was an excellent idea and it provides a nice contrast to the .05% and shows how meager the interest is on a savings account. Job well done. Congrats.

So my homework wants me to research a bank's interest rates and plug it in to both the simple and compound interest rate formulas, but the rate that I got from chase at

https://www.chase.com/index.jsp?pg_name=ccpmapp/individuals/savings/page/chase-plus-savings-rates

produces a ridiculously low amount of interest over 10 years.

However, when I just use the 0.05 instead of 0.0005 I get numbers that seem far more reasonable.

Here's my work using 0.05:

1. Compound Interest Investment after 10 years:

A= P(1+r/n)nt

A=7500(1+0.05/12)12*10

A=7500(1.00004167)120

A=$12,352.57

2. Simple Interest Investment after 10 years:

A=P + Prt

A=7500 + (7500)(0.05)(10)

A=7500 + 3750

A=$11,250

And then 0.0005...:

1.Compound Interest Investment after 10 years:

A= P(1+r/n)^nt

A=7500(1+.0005/12)^12*10

A=7500(1.00004167)^120

A=7500(1.005)

A=$7537.59

2.Simple Interest Investment after 10 years:

A= P + Prt

A= 7500 + (7500)(0.0005)(10)

A=7500 + 37.5

A=$7503.75