1. Jack Palomo has deposited $2,500 today in an account paying 6 percent interest annually. What would be the simple interest earned on this investment in five years? If the account paid compound interest, what would be the interest on interest in five years?

Deposit today = PV = $2,500 Interest rate = i = 6% No. of years = n = 5

Future value Simple interest:

Simple interest per year = PV x (i) x n =

Future value with compound interest:

FV₅ = PV (1 + i)⁵ =