(Simple and Compound Interest Computations) Lyle O \'Keefe invests $37,100 at 8%
ID: 2379813 • Letter: #
Question
(Simple and Compound Interest Computations)
Lyle O 'Keefe invests $37,100 at 8% annual interest, leaving the money invested without withdrawing any of the interest for 9 years. At the end of the 9 years, Lyle withdrew the accumulated amount of money.
(a) Compute the amount Lyle would withdraw assuming the investment earns simple interest. $ Lyle O 'Keefe invests $37,100 at 8% annual interest, leaving the money invested without withdrawing any of the interest for 9 years. At the end of the 9 years, Lyle withdrew the accumulated amount of money.Explanation / Answer
a) amount Lyle would withdraw assuming the investment earns simple interest= 37100*(1+0.08*9) = 63812
b)amount Lyle would withdraw assuming the investment earns interest compounded annually. = 37100*(1+0.08)^9 = 74163.07
c)amount Lyle would withdraw assuming the investment earns interest compounded semi annually. = 37100*(1+0.04)^18 = 75157.79
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