P4-7 (similar to) Question Help Suppose you invest $ 800$800 in an account payin

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P4-7 (similar to)

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Suppose you invest

$ 800$800

in an account paying

3 %3%

interest per year.a. What is the balance in the account after

33

years? How much of this balance corresponds to "interest on interest"?b. What is the balance in the account after

3030

years? How much of this balance corresponds to "interest on interest"?a. What is the balance in the account after

33

years?The balance in the account (with compounded interest) after

33

years is

$nothing.

(Round to the nearest cent.)

P4-7 (similar to)

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Explanation / Answer

balance after 33 years=800*(1+3%)^33=2121.87

How much of this balance corresponds to "interest on interest=(800*(1+3%)^33)-(800+800*3%*33)=529.87

balance after 30 years=800*(1+3%)^30=1941.81

How much of this balance corresponds to "interest on interest=(800*(1+3%)^30)-(800+800*3%*30)=421.81

the above are the answers

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