Asked by Anonymous

$2,000 at 12% for 20 years

(a) Calculate the future amount if the money were invested at simple interest

(b) Calculate the future amount if the money were invested with annual compounding. (Round your answer to the nearest cent.)

Answers

Answered by Reiny
a) using simple interest for 20 years
amount = P + Prt
= 2000 + 2000(.12)(20) = 6800

b) -- compound interest (what's actually being done)
Amount = 2000(1.12)^20 = 19292.59
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