 # Question & Answer: At the end of the 10 years, Alan withdraws the accumulated amount of money…..

Alan Jackson invests \$37,700 at 10% annual interest, leaving the money invested without withdrawing any of the interest for 10 years. At the end of the 10 years, Alan withdraws the accumulated amount of money.    Don't use plagiarized sources. Get Your Custom Essay on
Question & Answer: At the end of the 10 years, Alan withdraws the accumulated amount of money…..
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(a)  Your answer is correct.

Compute the amount Alan would withdraw assuming the investment earns simple interest. (Round answers to 0 decimal places, e.g. 458,581.)

 Total withdrawn \$ Attempts: 1 of 3 used    (b)

(Use the table below.) Compute the amount Alan would withdraw assuming the investment earns interest compounded annually. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

 Total withdrawn \$ 1.Computation of the amount Alan would withdraw assuming the investment earns simple interest

Simple interest formula = PTR/100

here principle = \$37,700

time = 10years

interest rate = 10%

simple interest = (37,700 * 10 * 10)/100 = \$ 37,700

Total amount can be withdrawn by alan = (principle = simple interest) = 37,700 + 37,700 =\$ 75,400

2.Compute the amount Alan would withdraw assuming the investment earns compound interest:

compound interest formula = p(1+r/100)n

= 37,700(1+10/100)10

= 37,700(11/10)10

= 37,700(1.1)10

= 37,700 * 2.5937

= \$ 97,784

Total amount can be withdrawn by alan    = \$ 97,784.09