To make CDs look more attractive as an investment than they really are, some banks advertise that their rates are higher than their competitors' rates; however, the fine print says that the rate is based on simple interest. If you were to deposit $12,000 at 12% per year simple interest in a CD, what compound interest rate would yield the same amount of money in 3 years? The compound interest rate that would yield the same amount of money in 3 years is % per year.

To make CDs look more attractive as an investment than they really are, some banks advertise that their rates are higher than their competitors' rates; however, the fine print says that the rate is based on simple interest. If you were to deposit $12,000 at 12% per year simple interest in a CD, what compound interest rate would yield the same amount of money in 3 years? The compound interest rate that would yield the same amount of money in 3 years is % per year.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

To make CDs look more attractive as an investment than they really are, some banks advertise that their rates are higher than their
competitors' rates; however, the fine print says that the rate is based on simple interest. If you were to deposit $12,000 at 12% per year
simple interest in a CD, what compound interest rate would yield the same amount of money in 3 years?
The compound interest rate that would yield the same amount of money in 3 years is
% per year.

The Department of Traffic Security of a city is considering the purchase of a new drone for aerial surveillance of traffic on its most
congested streets. A similar purchase 4 years ago cost $825,000. At an interest rate of 10% per year, what is the equivalent value
today of the previous $825,000 expenditure?
The equivalent value today is $

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PLEASE ANSWER ASAP AND NEAT ONLY IF 100% CORRECT!
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