


Expert Answer
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Total amount can be withdrawn by alan = (principle = simple interest) = 37,700 + 37,700 =$ 75,400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Total amount can be withdrawn by alan = $ 97,784.09