Jerry Rees invested $9,100 at 12% annual interest, and left the money invested w

Question

Jerry Rees invested $9,100 at 12% annual interest, and left the money invested without withdrawing any of the interest for 12 years. At the end of the 12 years, Jerry withdrew the accumulated amount of money.

Click here to view the factor table.

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

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

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

$

Explanation / Answer

A) Simple Interest

= 9100+(9100*12%*12) i.e 22204

B) Compound Interest = 9100(1+0.12)^12

= 9100*3.896 i.e 35453.38

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