rate of interest
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The accompanying table,
,
shows a series of transactions in a savings account. The account pays
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.)
|
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.)Expert Solution
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