Paul White invested $7.200 at 8% annual interest, and left the money invested without withdrawing any of the interest for 8 years. At the end of the 8 years, Paul withdrew the accumulated amount of money. Click here to view the factor table 1. Table 2 Table 3. Table 4 (a) What amount did Paul withdraw, assuming the investment earns simple interest? The amount Paul withdrew $

Paul White invested $7.200 at 8% annual interest, and left the money invested without withdrawing any of the interest for 8 years. At the end of the 8 years, Paul withdrew the accumulated amount of money. Click here to view the factor table 1. Table 2 Table 3. Table 4 (a) What amount did Paul withdraw, assuming the investment earns simple interest? The amount Paul withdrew $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Michelle Payne deposited $24,000 in a savings account paying 6.25% simple interest. How long (in years) will it take for her investment to amount to $42,000?
TO DO: Answer the questions below related to if simple interest versus compound interest were at play. Willie invested $6,000 at 5% annual interest, and left the money invested without withdrawing any of the interest for 12 years. At the end of the 12 years, Willie withdrew the accumulated amount of money. (a) What amount did Willie withdraw, assuming the investment earns simple interest? (b) What amount did Willie withdraw, assuming the investment earns interest compounded annually? Megan Company earns 6% on an investment that will return $450,000 8 years from now. What is the amount Megan should invest now, assuming the 6% will be constant, to have $450,000 in 8 years? TIP: The present value formula will be easiest (if that formula makes sense). You can also use the future value and "play" with numbers to see what makes it work. Finally, you could also set up a small spreadsheet to use numbers to get the desired math to work. Reach out if you are struggling.
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