Consider Suppose your city is building a new park, and issues bonds to raise the money...
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Consider Suppose your city is building a new park, and issues bonds to raise the money to build it. You obtain a $1000 bond that pays 3% interest annually and matures in 5 years. How much will the bond be worth in 5 years? What is the appropriate formula to use to solve this problem? Simple One-time Interest A = P₁*(1+r) Simple Interest over Time A = Po*(1+rt) Compound Interest PN = P₁*(1+) N Annuity Formula PN = Loans Formula Po (E) d* (1− (1+ £) ~ ~k) (E) Consider Suppose your city is building a new park, and issues bonds to raise the money to build it. You obtain a $1000 bond that pays 3% interest annually and matures in 5 years. How much will the bond be worth in 5 years? What is the appropriate formula to use to solve this problem? Simple One-time Interest A = P₁*(1+r) Simple Interest over Time A = Po*(1+rt) Compound Interest PN = P₁*(1+) N Annuity Formula PN = Loans Formula Po (E) d* (1− (1+ £) ~ ~k) (E)
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Option 2 ie We will use Simple interest over time IP0rt AP0I P0P0rtP01rt I is the inter... View the full answer
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