HP borrowed money to do rapid prototyping for a new ruggedized computer EXAMPLE 1.4 that targets desert oilfield conditions. The loan is $1 million for 3 years at 5% per year simple interest How much money will HP repay at the end of 3 years? Tabulate the results in $1000 units. EXAMPLE 1.5 If HP borrows $1.000.000 from a different source at 5% per year conmpound interest, compute the total amount due after 3 years. Compare the results of this and the previous example.
EXAMPLE 1.4 /
HP borrowed money to do rapid prototyping for a new ruggedized computer that targets desert oilfield conditions. The loan is $1 million for 3 years at 5% per year simple interest. How much money will HP repay at the end of 3 years? Tabulate the results in $1000 units.
EXAMPLE 1.5 /
If HP borrows $1,000,000 from a different source at 5% per year compound interest, compute the total amount due after 3 years. Compare the results of this and the previous example.
Comment : The difference between simple and compound interest grows signif- icantly each year. If the computations are continued for more years, for exam- ple, 10 years, the difference is $128.894; after 20 years compound interest is $653.298 more than simple interest.
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