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First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City Bank pays 8 percent interest compounded annually. If you

First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City Bank pays 8 percent interest compounded annually.

If you made a $74,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 8 years?

Calculation:

If the Hunter Corp. has an ROE of 15 and a payout ratio of 18 percent, what is its sustainable growth rate?

The Wintergrass Company has an ROE of 14.5 percent and a payout ratio of 40 percent.

What is the sustainable growth for both companies?

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