Question

suppose your friend's parents invest $20,000 in an account paying 6% annually. what will the balance be after 6 years?

Answer 1

If accumulated but not compounded
.06 * 20,000 = 1200 per year
1200 * 6 = 7200 total interest
7200 + 20,000 = 27,200

If compounded annually
20,000 * 1.06^6 = 20,000*1.4185 = 28,370.38

Answer 2

thank you so much