Suppose you invest $1000 in an account paying 8% interest per year. a. What is the balance
Question:
Suppose you invest $1000 in an account paying 8% interest per year.
a. What is the balance in the account after 3 years? How much of this balance corresponds to “interest on interest”?
b. What is the balance in the account after 25 years? How much of this balance corresponds to “interest on interest”?
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Plan You must first compute the FV and then subtract the initial inves...View the full answer
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Related Book For 
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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