Question

A. If you have a choice between depositing your $100 into an account that earns 5% simple interest for 5 years, or one that earns 4% compound interest for 5 years, which would you choose?

(I have all the answers except this one: "After 15 years, your deposit in the 4% account would be worth $__." What is the answer to this?)


Instructions: Enter your responses as whole numbers.


After 5 years, your deposit in the 5% account would be worth $125.


After 5 years, your deposit in the 4% account would be worth $121.67.


Therefore, you should choose
the account that yields 5% simple interest.



b. What if you were depositing your $100 for 15 years?
Instructions: Enter your responses as whole numbers.


After 15 years, your deposit in the 5% account would be worth $
175.

After 15 years, your deposit in the 4% account would be worth $ __ .


Therefore, you should choose the account that yields 4% compounded interest.

Answer 1

If you invested $10,000 in a mutual fund and the fund earned a 6% return for the year, it means you gained $600, and your investment would be worth $10,600. If you got an average 6% return the following year, it means your investment would be worth $11,236.

Step-by-step explanation: