Suppose you invest $1000 in an account paying 8% interest per year. a. What is the balance

Question:

Suppose you invest $1000 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”?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Fundamentals Of Corporate Finance

ISBN: 9780135811603

5th Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

Question Posted: