Suppose $10,000 suddenly falls out of the sky and into your lap. Rather than spend it,...
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Suppose $10,000 suddenly falls out of the sky and into your lap. Rather than spend it, you wisely invest it in an asset that pays an interest rate of 8% per year (compounded annually). At the end of 40 years, how much has this $10,000 grown to? How much of it is simple interest and how much of it is compound interest? Suppose $10,000 suddenly falls out of the sky and into your lap. Rather than spend it, you wisely invest it in an asset that pays an interest rate of 8% per year (compounded annually). At the end of 40 years, how much has this $10,000 grown to? How much of it is simple interest and how much of it is compound interest?
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To calculate the future value of the investment after 40 years we can use the compound interest form... View the full answer
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