First City Bank pays 7 percent simple interest on its savings account balances, whereas Second City Bank pays 7 percent interest compounded annually. If you made a depositof $62,000 in each bank, how much more money would you earn from your Second City Bank account at the end of 9 years?
First City Bank pays 7 percent simple interest on its savings account balances, whereas Second City Bank pays 7 percent interest compounded annually. If you made a depositof $62,000 in each bank, how much more money would you earn from your Second City Bank account at the end of 9 years?
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 5Q: If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the...
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First City Bank pays 7 percent simple interest on its savings account balances, whereas Second City Bank pays 7 percent interest compounded annually. If you made a depositof $62,000 in each bank, how much more money would you earn from your Second City Bank account at the end of 9 years? |
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Step 1: Formulas.
VIEWStep 2: Computation of Future value at the end of 9 years of account with First City Bank.
VIEWStep 3: Computation of Future value at the end of 9 years of account with Second City Bank.
VIEWStep 4: Computation of Extra amount earned from Second City Bank account
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