E6-2 (Simple and Compound Interest Computations) Alan Jackson invests $20,000 at 8% annual interest, leaving the money 8 years. At the end of the 8 years, Alan withdrew the accumulated amount of money.
Instructions
(a) Compute the amount Alan would withdraw assuming the investment earns simple interest.
(b) Compute the amount Alan would withdraw assuming the investment earns interest compounded annually.
(c) Compute the amount Alan would withdraw assuming the investment earns interest compounded semi-annually.
TUTORIAL PREVIEW
(a) Compute the amount Alan would withdraw assuming the investment earns simple interest.
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Simple interest of $1,600 per year x 8
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$12,800
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Principal
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$20,000
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