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January 25, 2015

January 25, 2015

Posted by **Daniel** on Sunday, April 7, 2013 at 12:43am.

So i thought it would be :

A = 7500(1+0.09)^(20)

A = 42033...

However I have been told it could be:

Value = 7500 + 7500*0.09*20 = $21,000

Which is the correct method?

- math -
**Reiny**, Sunday, April 7, 2013 at 1:14amthe first method uses compound interest which would be the normal way of doing it.

The second uses simple interest, a method used for very short periods of time and certainly does not fit into a 25 year period

I would be my money on

A = 7500(1+0.09)^(20)

- math -
**Daniel**, Sunday, April 7, 2013 at 11:17amThank you very much.

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