This Quiz: 20 pts possible Suppose you invest S800 in an account paying 5% inter

Question

This Quiz: 20 pts possible Suppose you invest S800 in an account paying 5% interest per year. a. What is the balance in the account after 4 years? How much of this balance corresponds to "interest on interest? b. What is the balance in the account after 28 years? How much of this balance corresponds to "interest on a. What is the balance in the account after 4 years? The balance in the account after 4 years is (Round to the nearest cent) How much of this balance corresponds to "interest on interest"? The amount that corresponds to interest on interest is s( b. What is the balance in the account after 28 years? The balance in the account after 28 years is s (Round to the nearest cent.) How much of this balance corresponds to "interest on interest? The amount that corresponds to interest on interest is s(Round to the nearest cent.) Round to the nearest cent.) Enter your answer in each of the answer boxes Save for Later 5:18 PM 9/23/2018 PrtScn Home End PgUp PgDn Ins F8 F9 F10 F11 F12 Back

Explanation / Answer

a. balance after 4 years = 800 * 1.05^4 = 972.41

total interest = 172.41

simple interest = 5*4 * 800 = 160

interest on interest = 12.41

b. balance after 28 years = 800*1.05^28 = 3136.10

total interest = 2,336.10

simple interest =5%*28*800 = 1120

interest on nterest = 1,216.10

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