Economics - Finance

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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?

  • Economics - Finance -

    the same as every other year: .055*100 = 5.50

    100(1+.055*3) = 116.50

    100(1.055)^3 = 117.42

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