Lisa deposits $80,000 into an account that pays 6% interest per year, compounded annually. Scott deposits $80,000 into an account that also pays 6% per year. But it is simple interest. Find the interest Lisa and Scott earn during each of the first three years.Then decide who earns more interest for each year. Assume there are no withdrawals and no additional deposits.
Lisa deposits $80,000 into an account that pays 6% interest per year, compounded annually. Scott deposits $80,000 into an account that also pays 6% per year. But it is simple interest. Find the interest Lisa and Scott earn during each of the first three years.Then decide who earns more interest for each year. Assume there are no withdrawals and no additional deposits.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Lisa deposits $80,000 into an account that pays 6% interest per year, compounded annually.
Scott deposits $80,000 into an account that also pays 6% per year. But it is simple interest.
Find the interest Lisa and Scott earn during each of the first three years.Then decide who earns more interest for each year. Assume there are no withdrawals and no additional deposits.
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