simple and compund interset

# simple and compund interset - How much would Jane need to...

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Ex. 8: Simple & Compound Interest Edward invested \$100 for 8 years in an account paying 7% simple interest. Fay invested \$100 for 8 years in an account paying 5.8% compound interest. Which is worth more after 8 years? Edward gets simple interest: FV t = PV×(1+r×t) FV 8 = 100×(1+0.07×8) = \$156 Fay gets compound interest: FV t = PV×(1+r) t FV 8 = 100×(1+0.058) 8 = \$156.99 Fay's investment is worth more (\$156.99 > \$156). Lecture Problems Eric invested \$500 in an account that earns 8% simple interest per year. How much will he have in 15 years? Jane can earn 7% per year in compound interest.

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Unformatted text preview: How much would Jane need to invest today to have as much as Eric in 15 years? If Martha invests \$500 in an account that earns 9% per year in compound interest, how much will she have in 12 years? If Carl can invest \$600 today, then what rate of simple interest would Carl need to earn each year to have as much as Martha in 12 years? For Monday If you haven't done these already. .. Download the full syllabus from Blackboard. Get a calculator and an i-clicker remote. Get registered for Connect....
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