Question

Jozy Altidore invested $8,600 at 9% annual interest, and left the money invested without withdrawing any of the interest for 13 years. At the end of the 13 years, Jozy withdrew the accumulated amount of money.

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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

(a) What amount did Jozy withdraw, assuming the investment earns simple interest?

The amount Jozy withdrew

$enter the accumulated amount assuming the investment earns simple interest

(b) What amount did Jozy withdraw, assuming the investment earns interest compounded annually? (Round answer to 2 decimal places, e.g. 25.25.)

The amount Jozy withdrew

$enter the accumulated amount rounded to 2 decimal places assuming the investment earns interest compounded annually

Answer 1

a) Amount of withdraw with Simple interest = 8600+(8600*9%*13) = 18662

b) Amount of withdraw with compound interest = 8600*3.06580 = $26365.88