Jerry Rees invested $8,200 at 9% annual interest, and left the money invested wi

Question

Jerry Rees invested $8,200 at 9% annual interest, and left the money invested without withdrawing any of the interest for 9 years. At the end of the 9 years, Jerry withdrew the accumulated amount of money.

1). What amount did Jerry withdraw, assuming the investment earns simple interest?

2). What amount did Jerry withdraw, assuming the investment earns interest compounded annually?

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Explanation / Answer

1) If earn simple interest amount on maturity after 9 years = $8200 + ((8200X 9%) X9) = $8200 + $ 6642 = $ 14842 2) If earn interest compounded annualy amount on maturity after 9 years = $8200X ((1+9%) ^9) = $8200 X 1.09 X1.09X1.09X1.09X1.09X1.09X1.09X1.09X1.09 = $ 17809.52

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