When michael is born, four uncles decide to save money for his future in different ways: uncle a: he deposits $50 on michael's first birthday, and every subsequent birthday. uncle b: he deposits $15 on michael's first birthday, and every subsequent birthday he deposits $5 more than the previous year. uncle c: he deposits $40 on michael's first birthday, and every subsequent birthday he deposits 5% more than the previous year. uncle d: at michael's birth he deposits $300 in a savings account which offers 2.7% interest compounded quarterly. by the time michael is 21 years old, which uncle has saved the most money for him?

By the time Michael is 21 years old, Uncle C has saved the most money.

Explanation:

Uncle A = $50 on Michael's first birthday, and same on each birthday

When Michael is 21 years of old, His Uncle A will save = $50 x 21 = $1,050

Uncle B = $15, and $5 more than the previous year. It means 15, 20, 25...

When Michael is 21 years of old, His Uncle B will save = $1,365

Here is the sequence = (15+20+25+30+35+...............+100+105+110+115)

Uncle C = $40, and 5% more than the previous year. It means $40 x 1.05 = $42 in the 2nd year.

When Michael is 21 years of old, His Uncle C will save = $1,428.77 (See the image below to get the proper explanation)

Uncle D = $300. It offers 2.7% interest compounded quarterly. When Michael is 21 years of old, His Uncle D will save = $527.88

Using the Future value, we can determine Uncle D's savings. Hence,

FV = PV ×

FV = $300 ×

FV = $300 × 1.7596

FV = $527.88

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