Suppose you invest $1000 in an account paying 8% interest per year.

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”

Expert Solution

In 3 years, interese, the present values are solved

By putting all the values from the question given data. you can also do that in excel just by using the formula in a cell =FV press tab then simply follow up the formula by putting all the data in sequence vise.

FV in 3 years= $1,000 x(1.08)^3= $1259.71 ,

For interest FV-PV= $1259.71-$1000= $259.71

PV interest=$1000x0.08x3= 240 Interest cal= $259.71-240= $19.71

umair jan answered 3 years ago

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Suppose you invest $1000 in an account paying 8% interest per year.

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