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rate of interest

rate of interest

FINANCIAL ACCOUNTING
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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Question
The accompanying​ table,
Data table
Date
Deposit​ (Withdrawal)
Date
Deposit​ (Withdrawal)
 
​1/1/20
​$8,000
​1/1/22
​$3,272
​1/1/21
​$(6,540​)
​1/1/23
​$5,255
​(Click on the icon located on the​ top-right corner of the data table below in order to copy its contents into a​ spreadsheet.)
​,
shows a series of transactions in a savings account. The account pays
5​%
simple​ interest, and the account owner withdraws interest as soon as it is paid. Calculate the​ following:
a. The account balance at the end of each year.​ (Assume that the account balance at December​ 31, 2019, is​ zero.)
b. The interest earned each year.
c. The true rate of interest that the investor earns in this account.
 
 
 

Question content area bottom

Part 1
a. The account balance at the end of
2020
is
​$8,0008,000.
​ (Round to the nearest​ dollar.)
Part 2
The account balance at the end of
2021
is
​$1,9531,953.
​ (Round to the nearest​ dollar.)
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