Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,…..

Exercise 6-2 (Part Level Submission)

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.

Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,..... 1
Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,..... 1
Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,..... 1
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(a)

Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,..... 1
Correct answer. 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Total withdrawn $Entry field with correct answer
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Attempts: 1 of 3 used
Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,..... 1
Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,..... 1
Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,..... 1
Collapse question part

(b)

Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,..... 1
Correct answer. Your answer is correct.

(Use the table below.)

Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,..... 9
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Total withdrawn $Entry field with correct answer
SHOW SOLUTION

SHOW ANSWER

LINK TO TEXT
Attempts: 1 of 3 used
Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,..... 1
Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,..... 1
Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,..... 1
Collapse question part

(c)

(Use the table below.)

Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,..... 13
Compute the amount Alan would withdraw assuming the investment earns interest compounded semiannually. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Total withdrawn $Question & Answer: ted without withdrawing any of the interest for 10 years. At the end of the 10 years,..... 1

Expert Answer

 

a)

Total amount withdrawn = $37,700 + ($37,700*10%*10 years) = $37,700 + $37,700 = $75,400

b)

Total amount withdrawn = $37,700*1.1010 = $97,784.09

c)

Number of semi-annual periods = 10 years * 2 = 20

Semi-annual interest rate = 10%/2 = 5% = 0.05

Total amount withdrawn = $37,700*1.0520 = $100,029.32

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