Suppose that a man lends $1000 for four years at 12% per year simple interest. At...
Suppose that a man lends $1000 for four years at 12% per year
simple interest. At the end of the four years, he invests the
entire amount which he then has for 10 years at 8% interest per
year, compounded annually. How much money will he have at the end
of the 14-year period?
From (1.2) and (1.3),
F = P(1+ n~il)(l+ i2)"2 = $1000[1+ (4)(0.12)](1+ 0.08)" =
$1000(1.48)(2.15892) = $3195.21
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Suppose that a man lends $1000 for four years at 12% per year
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