Economics - Finance
posted by Wendi Jones .
If your bank pays 5.5 percent interest on savings deposits, what is the simple interest paid in the third year on an initial $100 deposit?
What is the total amount in the account after three years?
What is the amount after three years if the interest was compounded annually?
the same as every other year: .055*100 = 5.50
100(1+.055*3) = 116.50
100(1.055)^3 = 117.42