Question

Tony Jackson invests $58,800 at 10% annual interest, leaving the money invested without withdrawing any of the interest for 10 years. At the end of the 10 years, Tony withdraws the accumulated amount of money. Compute the amount Tony would withdraw assuming the investment earns simple interest. (Round answers to 0 decimal places, e.g. 458,581.) Total withdrawn s e Textbook and Media Click here to view factor tables Compute the amount Tony would withdraw assuming the investment earns interest compounded annually. (Round factor values to 5 decimal places, e.g. 1.25124 and final answerte decimaleses, e.g.

Answer 1

Simple Interest a Principal x Time Interate period :$58200 x 10 x 104 _ 58,400 X 16 x6 100 -= $58,000 Amount Tony would withdraw at the end of lo year Core it in vestment earoc simple interact would be Amounte principal interest - $52200 + $52,200 = $117,600 2) Compound boterest (interest Compounded annualy) Amount Tony would withdraw at the end of 10 year if investment carns interest compounded annually Amounts p[i+i)? . 58,800 (1 + tomato = 58,000 (1-1]' = 58,000 (2-5937) = $152,509 IcSScanned-with CamScanner

3) compound Interest (Labemost compounded semiannuali ng No.of periods : _10 x 2 - compounded twice in a year n. 20 _ ia 10% 2 since compounded twice pia 25% i Amount: pliti)? - 3 52,200 (17 st = 58,800 (1.050 = 58,800 [2.6533) $156, 014 Scanned with CamScanner

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