Newman Jackson invests $32,500 at 10% annual interest, leaving the money investe
ID: 2341393 • Letter: N
Question
Newman Jackson invests $32,500 at 10% annual interest, leaving the money invested without withdrawing any of the interest for 10 years. At the end of the 10 years, Newman withdraws the accumulated amount of money. Newman Jackson invests $32,500 at 10% annual interest, leaving the money invested without withdrawing any of the interest for 10 years. At the end of the 10 years, Newman withdraws the accumulated amount of money. SHOW SOLUTION SHOW SOLUTION SHOW SOLUTION LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXTExercise 6-2
Newman Jackson invests $32,500 at 10% annual interest, leaving the money invested without withdrawing any of the interest for 10 years. At the end of the 10 years, Newman withdraws the accumulated amount of money.Explanation / Answer
Answer:
Newman Jackson Invests P=32,500,time T=10 years,Interest Rate=10%
Simple Interest Case:
Simple Interest = PTR = 32,500*10*10/100 = 32500
Total Amount to be drawn = 32500+32500 = 65000
Compound Interest Case:
Total amount to be drawn
= P[(1+i)n]
= 32500[(1+0.1)10]
= 84297
for Semianually compound case:
I will become half i= 5%.
N will become double, N= 20cycles
Total Amount Withdrawn = 32500+35900
Total amount to be drawn
= P[(1+i)n]
=86232