WiReD INC. 

You need it we got it.

Diana Messer
CEO

Kanyon
Designer/Manager

Trey
CO-CEO
 

Institution

APY
annual percent yield

Rate

Min Deposit

2 year CD
    -Synchrony
     bank

- 1.35%

- 1.34%

- 2,000

5 year CD
    - first internet
bank of Indiana     

What will the amount be after the CD expires? 

- 2.12%

- 2.10%

- 1,000

For the two year certificates of deposit it has a annual percent yield of 1.35% and a minimum deposit of 2,000. Over the years we pay Synchronous bank this amount and in return we will get the money back. Why pay this bank..... let me show you.

                A Certificate of deposit is a similar to a saving account, all the money we put in... we get it out. Over the amount of years that our company "WiReD INC." has this saving account the better off we will be prepared for any financial issues along the road... This is us staying one step ahead of ourselves. 

Lets create a function
that will represent the money over two years:

     F(x)=2,000(1.35)^x
If x = 2

In two years we would have 5400

Now if we decided to go for a five year certificate of deposit we would pair up with the first internet bank of Indiana annual percent yield of 2.12% and a minimum deposit of 1,000 dollars. Now if we paired up with this bank with loyalty to the money in the bank whatever we put in, we get out.

 If we create a function that    represents this CD what is  the outcome over 5 years?
             f(x)=1,000(2.12)^x
 if x=5
               

                     *10,600*

A investor recently walked into my office and said that if i handed him the 5,000 dollars right now that he would pay me $50 dollars back each year that he owes me. Lets look at a chart. 

Jake from Colorado federal savings bank stepped foot into my office and said that he has a annual percent yield of 1.50% and a minimum deposit of 5,000 dollars, plus $50 dollars each year if we partner up right now. Well I told him to have a seat and I did the math on the paper right in front of him. Take a look. 

we are looking at 5,000 with a APY of 1.50 plus 50 dollars a year.
f(x)=5,000(1.50)^x+250 
(250 meaning 50 dollars each year over 5 years.)
        *37,750* over 5 years 

We are looking at 5,000 with a APY of 1.50 plus 50 dollars a year.
f(x)=5,000(1.50)^x+100
(100 meaning 50 dollars each year over 2 years.)                      *15,150* over 2 years

To make it a little simpler lets design a chart of the investors plan, we can calculate how much money we will get each year and determine if this is the right thing for our business.  

7500                                15000                          22500                        30000                         37500 

7500                                15000 

7550                                15100                           22650                          30200                          37750                         

Jake's proposition is a liner function, I say this because each year 50 dollars is being added onto this investment. The CD's themselves are a exponential function because nothing is being added to them each year, hence making it a lower amount than the liner function. What is the average rate change of the investors plan, The  5 year CD plan between the years of 2 and 3 and 3 and 5?

The investors average rate change is 1.50% each year the amount of money is 7550.
For the 5 year CD plan the average rate change between the years 2 and 3 it is 1.50% and the amount of money a year is 7500. For the years 3 to 5 the average rate change is 3% and the money is 15000.

Kanyon, The co-ceo then brings to my attention another investment  with the function f(x)=5,000(1.02)^x, she wonders that if we had a chance to do this function for 5 years would it be better? lets take a look.

f(x)=5000(1.02)^x
if x=5
            *25,500*
The 5 year CD I found within the 5 year period we would have 10,600.
The Investment Ashlee found was way better than the one I came across. Although the investment Jake offered was better than the one she found. 

My recommendation is to choose Jakes investment because by the end of 5 years we would have 37,750. We would want more money saved up  for our own company by the end of 5 years. He is also willing to give 50 dollars each year if i invested right now. However if we cannot collect our money until it is fully matured I would recommend doing the 2 year CD and renewing it every 2 years.