Suppose you invest $1,000 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"?

Part 1

a. What is the balance in the account after 3

years? The balance in the account (with compounded interest) after 3 years is

$1259.711259.71.

(Round to the nearest cent.)

Part 2

The balance in the account (with simple interest) after 3 years is $1,240.00.

(Round to the nearest cent.)

Part 3

How much of this balance corresponds to "interest on interest"?

The interest on interest is: $19.71

(Round to the nearest cent.)

Part 4

b. What is the balance in the account after 25 years? The balance in the account (with compounded interest) after 25 years is: $6848.48

(Round to the nearest cent.)

Part 5

The balance in the account (with simple interest) after 25 years is: ???

(Round to the nearest cent.)

How much of this balance corresponds to "interest on interest"?

The interest on interest is: ???