Q2.2 Compound Interest: More typical interest computation applied in business situations Computes interest on: and Illustration 3: Vasquez Company deposits $10,000 in the Last National Bank, where it will earn simple interest of Simple vs. 9% per year. It deposits another $10,000 in the First State Bank, where it will earn compound Compound interest of 9% per year compounded annually. In both cases, Vasquez will not withdraw any interest until 3 years from the date of deposit. Year 1 Year 2 Year 3 Last National Bank Interest YE Balance First State Bank Interest YE Balance

Essentials Of Investments
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Q2.2 Compound Interest: More typical interest computation applied in business situations
Computes interest on:
Illustration 3: Vasquez Company deposits $10,000 in the Last National Bank, where it will earn simple interest of
Simple vs. 9% per year. It deposits another $10,000 in the First State Bank, where it will earn compound
Compound interest of 9% per year compounded annually. In both cases, Vasquez will not withdraw any interest
until 3 years from the date of deposit.
Year 1
Year 2
Year 3
lok X 9%
Last National Bank
Interest
and
YE Balance
First State Bank
Interest
YE Balance
Transcribed Image Text:Q2.2 Compound Interest: More typical interest computation applied in business situations Computes interest on: Illustration 3: Vasquez Company deposits $10,000 in the Last National Bank, where it will earn simple interest of Simple vs. 9% per year. It deposits another $10,000 in the First State Bank, where it will earn compound Compound interest of 9% per year compounded annually. In both cases, Vasquez will not withdraw any interest until 3 years from the date of deposit. Year 1 Year 2 Year 3 lok X 9% Last National Bank Interest and YE Balance First State Bank Interest YE Balance
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