Jeraldo invested $4,100 into a financial instrument that promised to pay him $1,000 at the end of

Question:

Jeraldo invested $4,100 into a financial instrument that promised to pay him $1,000 at the end of each year for the next five years. The salesperson explained that this would earn for him a 5% rate of return. At the end of five years, Jeraldo noticed that the dollar amount of his interest earnings had been smaller and smaller as the years went by. Explain why this happened.